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Environmental Vulnerability and Economic Growth: Small States vs Large States

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  • BRITO, JOÃO ANTONIO

Abstract

The purpose of this paper is to analyze empirically if the effect of environmental vulnerability on economic growth is conditioned by country size. Two groups of countries, large and small, were set up, and by using the System-GMM estimator and panel data in a 5-year rolling window, from 1970 to 2010, the impact of number of people killed or affected and cost of the disaster on growth rate of GDP per capita of the two groups of states was estimated. Also, the difference between small and large states in terms of the channels of transmission of the variables of interest was analyzed. Many studies consider small countries more vulnerable to natural disasters than large countries but this study indicates that, on average, large countries suffer more natural disasters than small countries and in terms of the effect of environmental vulnerability on growth rate of GDP per capita, there is no difference between small countries and large countries. Productivity is the main channel of transmission for both groups of countries.

Suggested Citation

  • Brito, João Antonio, 2015. "Environmental Vulnerability and Economic Growth: Small States vs Large States," MPRA Paper 65694, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:65694
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    More about this item

    Keywords

    Country Size; Small States; Environmental Vulnerability and Economic Growth.;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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