The determinants of economic growth in countries with high marine biodiversity

In this paper, we explore the economic growth determinants in 74 countries with high marine biodiversity for the period 1960-2009 through methodologies that take into account theory and specification uncertainty and the presence of multiple growth regimes. We find, firstly, that neoclassical (income), demography, macroeconomic policy, natural capital, fractionalisation and institutions theories are robust determinants of economic growth in these coastal countries. These results suggest that a country’s capacity to deal with marine biodiversity is associated with factors that impact economic growth. Secondly, in contrast with worldwide data sets, macroeconomic policies and natural capital are additional robust determinants of economic growth. There is strong historical evidence on the role of macroeconomic policies and non-renewable natural resources in trade flows and economic growth in coastal countries. Both factors, together with demography, highlight the pressures that coastal areas can be subject to such as construction and public works, population growth and urbanisation which, in turn, may degrade marine biodiversity. In fact, compared to other countries, coastal countries with high marine biodiversity have higher fertility rates, higher international trade exchanges, greater government consumption and lower institutional endowments. Thirdly, we find that education plays an important role in these countries. The rate of economic convergence increases with the level of education. Moreover, education and investment in physical capital have a significant and positive impact on economic growth in countries with very high levels of marine biodiversity. All together, our results suggest that diversifying away from natural capital wealth by investing in education and, more generally, in intangible capital can enhance economic growth, particularly in countries with very high levels of marine biodiversity. In turn, this structural change can contribute to remove pressure from marine biodiversity hotspots, mainly through lower fertility rates as education increases and lower dependence on natural capital exports via coastal areas.