Monetary and financial shocks to Russian mineral exports in BRICS: the moderating role of institutional quality

Md. Monirul Islam, Oleg Mariev

Abstract


Relevance. Monetary and financial policies play a crucial role in shaping trade in critical mineral goods, particularly where strong law and order are vital for sustaining trade and mitigating the effects of external conflicts. This study examines Russia’s mineral exports to other BRICS nations—a topic of growing strategic and regional importance.

Research Objective. The study explores how monetary and financial policy variables, specifically inflationary pressures and financial market volatility, affect Russia’s mineral exports to BRICS partners, considering the influence of domestic law and order conditions and external conflicts over 1996–2023.

Data and Methods. Using data for 1996–2023, the analysis applies advanced econometric techniques to address heterogeneity, cross-sectional dependence, and endogeneity. These include the method of moments quantile regression (MM-QR), Driscoll–Kraay standard errors (DKSE), and high-dimensional fixed effects (HDFE). Robustness is further assessed through structural break analysis.

Results. Inflationary pressures consistently reduce Russian mineral exports across all market conditions (quantiles q.25–q.95). Financial market volatility primarily constrains exports during bull markets (q.50–q.95). Law and order conditions have a uniformly positive impact, while external conflicts hinder exports in bear markets. The interaction between law and order and external conflict strengthens exports, highlighting the conflict-moderating role of strong institutions. Results remain robust under HDFE and structural break tests, though external conflict loses statistical significance when cross-sectional dependence is controlled via DKSE.

Conclusions. The findings emphasize the need for prudent monetary and financial management and underscore the importance of strong domestic institutions in sustaining Russia’s regional mineral trade amid external challenges.


Keywords


Russian mineral exports, inflationary pressures, financial market volatility, law and order, external conflict, BRICS

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References


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DOI: https://doi.org/10.15826/recon.2025.11.3.017

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