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Natural Resources, Globalization and Sustainable Economic Welfare: A Panel ARDL Approach /Recursos Naturales, Globalización y Bienestar Económico Sostenible: Un análisis ARDL en panel

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  • FUINHAS, JOSÉ ALBERTO

    () (University of Beira Interior, NECE-UBI, Rua Marquês d?Ávila e Bolama, 6201-001, Portugal.)

  • CARDOSO MARQUES, ANTÓNIO

    () (University of Beira Interior, NECE-UBI, Rua Marquês d?Ávila e Bolama, 6201-001, Portugal.)

  • DA SILVA FARIA, SAMUEL

    () (University of Beira Interior, Estrada do Sineiro, 6200-209 Covilhã, Portugal.)

Abstract

GDP has been the most widely accepted measure of economic performance but it fails to accurately measure economic development, overlooking key aspects of quality of life and sustainability. Thereby, the Index of Sustainable Economic Welfare (ISEW) emerges as the dominant alternative. This paper aims to (i) compare both GDP and ISEW as measures of economic performance and (ii) establish the effects of natural resource exploitation and globalization on both economic growth and sustainable development. A Panel Autoregressive Distributed Lag approach is used, to check for short and long-term effects. The panel is composed by 14 OECD countries, using annual data for the time span from 1995 to 2013. Results show that natural resources rents have a positive effect on GDP per capita in the short-run and a negative effect on ISEW per capita on both short and long-run. Trade openness has a positive impact on short-run economic growth and negative impact on long-term sustainable development. Policy makers ought to consider ISEW as an alternative and more accurate measure of economic performance, should implement policies that reduce the depletion of natural resources and confine the harmful effects of globalization to enhance economic development and create more welfare. El PIB ha sido la medida más aceptada de rendimiento económico, pero no se trata de una medida de desarrollo económico, no teniendo en cuenta aspectos clave de la calidad de vida y la sostenibilidad. Así, el Índice de Bienestar Económico Sostenible (ISEW) se asume como alternativa. Este artículo tiene como objetivo (i) comparar ambas medidas de desempeño económico y (ii) estudiar los efectos de la globalizacíon y de la explotación de recursos naturales en el crecimiento económico y el desarrollo sostenible. Se utiliza un enforque ARDL en panel, para comprobar los efectos de corto y largo plazo. El panel se compone de 14 países de la OECD, utilizando datos anuales para el período de tiempo de 1995 a 2013. Resultados indican que la explotacíon de los recursos naturales tiene un efecto positivo sobre el PIB per cápita en el corto plazo y efecto negativo en ISEW per cápita en ambos corto y largo plazo. La apertura comercial tiene un impacto positivo en el crecimiento económico de corto plazo y negativo en el largo plazo de desarrollo sostenible. Los directores de políticas deben a considerar el ISEW como una alternativa más exacta medida del desempeño económico, debiendo implementar políticas que reduzcan el agotamiento de recursos naturales y límite los efectos negativos de la globalización para mejorar el desarrollo económico y crear más bienestar.

Suggested Citation

  • Fuinhas, José Alberto & Cardoso Marques, António & Da Silva Faria, Samuel, 2017. "Natural Resources, Globalization and Sustainable Economic Welfare: A Panel ARDL Approach /Recursos Naturales, Globalización y Bienestar Económico Sostenible: Un análisis ARDL en panel," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 35, pages 653-672, Agosto.
  • Handle: RePEc:lrk:eeaart:35_3_6
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    References listed on IDEAS

    as
    1. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    2. Saunoris, James W. & Sheridan, Brandon J., 2013. "The dynamics of sectoral electricity demand for a panel of US states: New evidence on the consumption–growth nexus," Energy Policy, Elsevier, vol. 61(C), pages 327-336.
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    Keywords

    Desarrollo Económico; Globalización; ISEW; ARDL ; Economic Development; Globalization; ISEW; ARDL.;

    JEL classification:

    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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