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Digital development and China–BRICS trade: Role of institutional distance

Author

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  • Qin, Shuang
  • Deng, Hongbing
  • Hu, Shengmei

Abstract

The rise of digital technologies has transformed the dynamics of international trade, but their impact on emerging market coalitions has not been studied. Although previous research has explored digital development and institutional factors separately, little is known about their combined effect on trade relationships within the BRICS framework, particularly bilateral exchanges with China. This study employs transaction cost theory to analyze how digital advancement shapes trade patterns between the BRICS nations and China, while also investigating the moderating role of institutional distance. Using panel data from 2000 to 2022 and a two-way fixed-effects model, we find that digital development significantly enhances bilateral trade volumes, with institutional differences unexpectedly acting as positive moderators rather than barriers. The effects are especially pronounced in countries with advanced digital infrastructure but lower levels of economic development. These findings advance our understanding of digital transformation in international trade and offer strategic insights for strengthening economic cooperation among emerging markets in an increasingly digital global economy.

Suggested Citation

  • Qin, Shuang & Deng, Hongbing & Hu, Shengmei, 2025. "Digital development and China–BRICS trade: Role of institutional distance," Finance Research Letters, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016659
    DOI: 10.1016/j.frl.2024.106636
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