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Natural Disasters As Creative Destruction? Evidence From Developing Countries

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  • JESÚS CRESPO CUARESMA
  • JAROSLAVA HLOUSKOVA
  • MICHAEL OBERSTEINER

Abstract

Recent studies found a robust positive correlation between the frequency of natural disasters and the long‐run economic growth after conditioning for other determinants. This result is interpreted as evidence that disasters provide opportunities to update the capital stock and adopt new technologies, thus acting as some type of Schumpeterian creative destruction. The results of cross‐country and panel data regressions indicate that the degree of catastrophic risk tends to have a negative effect on the volume of knowledge spillovers between industrialized and developing countries. Only countries with relatively high levels of development benefit from capital upgrading through trade after a natural catastrophe. (JEL O13, O30, F18)

Suggested Citation

  • Jesús Crespo Cuaresma & Jaroslava Hlouskova & Michael Obersteiner, 2008. "Natural Disasters As Creative Destruction? Evidence From Developing Countries," Economic Inquiry, Western Economic Association International, vol. 46(2), pages 214-226, April.
  • Handle: RePEc:bla:ecinqu:v:46:y:2008:i:2:p:214-226
    DOI: 10.1111/j.1465-7295.2007.00063.x
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • F18 - International Economics - - Trade - - - Trade and Environment

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