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

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  • Rajapaksa, Darshana
  • Islam, Moinul
  • Managi, Shunsuke

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.

Suggested Citation

  • Rajapaksa, Darshana & Islam, Moinul & Managi, Shunsuke, 2017. "Natural capital depletion: The impact of natural disasters on inclusive growth," MPRA Paper 79277, University Library of Munich, Germany, revised May 2017.
    • Handle: RePEc:pra:mprapa:79277
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    4. Oscar Zapata, 2018. "Turning to God in Tough Times? Human Versus Material Losses from Climate Disasters in Canada," Economics of Disasters and Climate Change, Springer, vol. 2(3), pages 259-281, October.
    5. Ilan Noy & Shunsuke Managi & Stephane Hallegatte, 2018. "Economics of Disasters and Climate Change – The Journal’s First Year," Economics of Disasters and Climate Change, Springer, vol. 2(1), pages 1-3, April.
    6. George S. Atsalakis & Elie Bouri & Fotios Pasiouras, 2021. "Natural disasters and economic growth: a quantile on quantile approach," Annals of Operations Research, Springer, vol. 306(1), pages 83-109, November.
    7. Weerasekara, Sajeevani & Wilson, Clevo & Lee, Boon & Hoang, Viet-Ngu & Managi, Shunsuke & Rajapaksa, Darshana, 2021. "The impacts of climate induced disasters on the economy: Winners and losers in Sri Lanka," Ecological Economics, Elsevier, vol. 185(C).
    8. Lochan Kumar Batala & Wangxing Yu & Anwar Khan & Kalpana Regmi & Xiaoli Wang, 2021. "Natural disasters' influence on industrial growth, foreign direct investment, and export performance in the South Asian region of Belt and road initiative," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 108(2), pages 1853-1876, September.
    9. Halkos, George & Managi, Shunsuke & Tsilika, Kyriaki, 2018. "Spatiotemporal distribution of inclusive wealth data: An illustrated guide," MPRA Paper 85711, University Library of Munich, Germany.
    10. Hein, Walter & Wilson, Clevo & Lee, Boon & Rajapaksa, Darshana & de Moel, Hans & Athukorala, Wasantha & Managi, Shunsuke, 2019. "Climate change and natural disasters: Government mitigation activities and public property demand response," Land Use Policy, Elsevier, vol. 82(C), pages 436-443.
    11. Ye Tian & Qian Wan & Yao Tan, 2022. "Exploration on Inter-Relation of Environmental Regulation, Economic Structure, and Economic Growth: Provincial Evidence from China," Sustainability, MDPI, vol. 15(1), pages 1-23, December.
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    13. Yashobanta Parida & Swati Saini & Joyita Roy Chowdhury, 2021. "Economic growth in the aftermath of floods in Indian states," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 535-561, January.
    14. Rajapaksa, Darshana & Zhu, Min & Lee, Boon & Hoang, Viet-Ngu & Wilson, Clevo & Managi, Shunsuke, 2017. "The impact of flood dynamics on property values," Land Use Policy, Elsevier, vol. 69(C), pages 317-325.
    15. George Halkos & Mike G. Tsionas, 2019. "Accounting for Heterogeneity in Environmental Performance Using Data Envelopment Analysis," Computational Economics, Springer;Society for Computational Economics, vol. 54(3), pages 1005-1025, October.
    16. Halkos, George & Managi, Shunsuke & Tsilika, Kyriaki, 2018. "The multi-layer nature of Inclusive Wealth data and their dynamic interpretation," Economic Analysis and Policy, Elsevier, vol. 59(C), pages 160-170.
    17. Chen, Yin-E & Li, Chunyan & Chang, Chun-Ping & Zheng, Mingbo, 2021. "Identifying the influence of natural disasters on technological innovation," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 22-36.
    18. Daniel Friedrich, 2022. "How environmental goals influence consumer willingness-to-pay for a plastic tax: a discrete-choice analytical study," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(6), pages 8218-8245, June.
    19. Samuel Kwaku Agyei & Godwin Adolf Idan, 2022. "Trade Openness, Institutions, and Inclusive Growth in Sub-Saharan Africa," SAGE Open, , vol. 12(2), pages 21582440221, May.
    20. Alaa Ahmed & Guna Hewa & Abdullah Alrajhi, 2021. "Flood susceptibility mapping using a geomorphometric approach in South Australian basins," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 106(1), pages 629-653, March.
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    22. Bampatsou, Christina & Halkos, George & Beneki, Christina, 2021. "Energy and material flow management to improve EU productivity," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 83-93.

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    More about this item

    Keywords

    Natural capital; disaster; inclusive growth; sustainability; semi-parametric panel fixed effect model; fixed effect; quantile regression;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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