An empirical analysis of economic growth in countries exposed to coastal risks - Implications for their ecosystems

Farid Gasmi, Laura Recuero Virto and Denis Couvet

No 23-1399, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: Using a novel database on countries exposed to coastal risks (CR), this paper estimates an augmented neoclassical growth model that nests eight other new growth models. To account for uncertainty related to model multiplicity and choice of growth determinant proxies, we use a Bayesian model averaging (BMA) approach. A preliminary examination of the data shows that a country exposed to coastal risks is likely to be a former British colony characterized by a common law legal framework, a parliamentary political system, a high degree of international trade openness, a small language and ethnic fractionalization, weak public sector corruption, and a high fertility rate. The BMA-based model selection procedure shows that growth determinant proxies typically used in the neoclassical, macroeconomic policy, natural capital, and institutions theories are significantly correlated to growth in CR countries. These results suggest a dual implication as far as these countries’ coastal ecosystems are concerned. On the one hand, because they are heavily dependent on natural capital and have high fertility rates, these countries may potentially seek short-term economic gains at the expense of deteriorating their ecosystems. On the other hand, these countries’ good institutions and low levels of ethnic splitting may be conducive to sustainable management of these ecosystems.

Keywords: Economic growth; coastal risks; ecosystems; Bayesian model averaging (search for similar items in EconPapers)
JEL-codes: O13 O44 O47 Q01 Q20 Q22 Q32 (search for similar items in EconPapers)
Date: 2023-01-18
New Economics Papers: this item is included in nep-env
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