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Linking Wealth and Productivity of Natural Capital for 140 Countries Between 1990 and 2014

Author

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  • Robi Kurniawan

    (Tohoku University
    Ministry of Energy and Mineral Resources)

  • Shunsuke Managi

    (Kyushu University
    Queensland University of Technology, Gardens Point)

Abstract

This study explores the relationship between inclusive wealth, economic growth, and productivity of natural capital (including forestry, fishery, fossil energy reserves and minerals) for 140 countries between 1990 and 2014. For this objective, a Malmquist productivity index is developed, and regression analysis is performed. The results are threefold. First, we found that natural capital deterioration constituted the main driving force of declining wealth per capita following fossil fuel extraction. Second, the adjustment to a conventional productivity growth measure depends on GDP growth and an endowment growth shift of natural capital relative to other input factors. Third, we also found that the initial phase of GDP growth was accompanied by slower natural capital utilization followed by a phase of deterioration as these countries continue to develop economically. With further economic development, enhanced technology and effective natural resources utilization limit the material basis and result in reduced natural capital extraction. These results imply that natural capital extraction management for a broader income level can be implemented for sustainability in both the short and long term.

Suggested Citation

  • Robi Kurniawan & Shunsuke Managi, 2019. "Linking Wealth and Productivity of Natural Capital for 140 Countries Between 1990 and 2014," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(1), pages 443-462, January.
    • Handle: RePEc:spr:soinre:v:141:y:2019:i:1:d:10.1007_s11205-017-1833-8
    DOI: 10.1007/s11205-017-1833-8
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