Gravity Model: An Econometric Analysis of the Foreign Trade Dynamics between Russia and Belarus with the BRICS Countries

The study examines the relationship between key macroeconomic indicators and the dynamics of foreign trade relations between Russia and Belarus with BRICS countries from 2004 to 2023. For this purpose, econometric methods and the gravity model of foreign trade were used. The logarithmic values of exports and imports of Russia and Belarus to partner countries were used as dependent variables, while independent variables included the GDP of exporting and importing countries, GDP per capita, bilateral exchange rates and the ratio of trade volume to GDP of the countries in question. The results of the analysis indicated that the export volume of Russia and Belarus with BRICS partner countries was positively related to the GDP volumes of these countries and the GDP per capita volumes of exporting countries. The import volume of Russia and Belarus from other countries was also positively related to the GDP of those countries, the GDP per capita and the exchange rate of importing countries. The study revealed that the ratio of foreign trade turnover to the GDP of partner countries was inversely proportional to the import volume of Russia and Belarus from those countries. This confirmed the hypothesis that the dynamics of exports and imports of Belarus and Russia were largely influenced by the economic development of their partners and the scale of their own economies. In this regard, it is recommended that the governments of Russia and Belarus continue to develop trade relations with BRICS countries to enhance competitiveness in the global market and achieve higher economic development indicators. Further research could consider factors such as distance between countries, technological development and others.