EconPapers    
Economics at your fingertips  
 

Natural Disasters and Economic Growth: A Semiparametric Smooth Coefficient Model Approach

Nikos Fatouros () and Yiguo Sun ()

JRFM, 2020, vol. 13, issue 12, 1-9

Abstract: Despite the fact that growth theories suggest that natural disasters should have an impact on economic growth, parametric empirical studies have provided little to no evidence supporting that prediction. On the other hand, pure nonparametric regression analysis would be an extremely difficult task due to the curse of dimensionality. We therefore re-investigate the impact of natural disasters on economic growth, applying a semiparametric smooth coefficient panel data model that takes into account fixed effects. Our study finds evidence that the coefficient curve of investment is a U-shaped function of the severity of the natural disasters. Thus, for relatively small disasters, marginal returns to investment decrease on the severity of natural disasters. However, after a certain threshold, the coefficient of investment starts increasing as natural disasters become more severe.

Keywords: economic growth; fixed effects; natural disasters; smooth coefficient; panel data models (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.mdpi.com/1911-8074/13/12/320/pdf (application/pdf)
https://www.mdpi.com/1911-8074/13/12/320/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:13:y:2020:i:12:p:320-:d:462353

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().

 
Page updated 2022-08-12
Handle: RePEc:gam:jjrfmx:v:13:y:2020:i:12:p:320-:d:462353