Natural capital depletion: The impact of natural disasters on inclusive growth

Rajapaksa, Darshana and Islam, Moinul and Managi, Shunsuke (2017): Natural capital depletion: The impact of natural disasters on inclusive growth.

Abstract

The impact of natural disasters on inclusive growth has received little attention from empirical analyses compared to the attention focused on other growth parameters. Thus, this study considers country-level panel data (108 countries over 25 years) and estimates three econometric models to explore the nexus of natural capital depletion and climate-related natural disasters. The results indicate that the impact is nonlinear: there is an inverted ‘U’ shape for small-to-medium level disasters in which natural capital depletion is increasing. The impact of natural disasters is higher when the magnitude of resource depletion is lower or higher. Similarly, trade openness, FDI and GDP growth rate are other important determinants of natural capital. This paper provides insights into how sustainable development can be pursued by means of conserving natural resources in the face of frequent climate-related disasters. It particularly emphasizes the importance of considering small-to-medium size disasters and the threat of disaster in countries with low levels of natural capital depletion.

• Item Type: MPRA Paper
• Language: English
• Keywords: Natural capital, disaster, inclusive growth, sustainability, semi-parametric panel fixed effect model, fixed effect, quantile regression
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O44 - Environment and Growth; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation

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