Analysis on the Determinants of Financial Fragility in the Brics Countries

Abstract

Purpose- This study aims to reveal the variables that cause financial fragility in the BRICS countries through econometric analysis. Design/methodology/approach– By taking into account the literature, economic vulnerabilities and economic vulnerabilities, ten different variables are used and Panel Logit analysis method is used to determine which of these variables leads to financial fragility the most. Findings- The results of the analysis show that foreign trade deficit and interest expenditures are the variables that affect financial fragility significantly and in the same direction. Budget deficit, Gross Domestic Product and total savings are the variables that affect financial fragility significantly and inversely. Discussion- Contrary to the international literature, there is no empirical study in the national literature that considers “crises” as a dependent variable in the measurement of financial fragility. In the Turkish literature, several variables have been used in the measurement of financial fragility. This study, which reveals the determinants of financial fragility by focusing on global and national crises, is expected to contribute to the financial literature as it is the first of its kind in the national literature.