Natural capital and economic growth: a panel study approach

Sa-ad Iddrisu

International Journal of Sustainable Economy, 2019, vol. 11, issue 3, 258-272

Abstract: This paper employs panel data study of 63 developing countries to examine the relationship between natural capital and economic growth. Natural capital per capita and GDP per worker are used as proxies for natural capital and economic growth, respectively. Using three regression models, the results suggest there is a statistically significant positive relationship between natural capital and economic growth, and a long-run relationship (co-integration) between the variables. Therefore, treating natural capital as a substitute rather than as a complement in the production process undermines the important role natural capital plays for economic growth and development. Hence, national level governments should pay important attention to their natural capital.

Keywords: developing countries; economic growth; gross domestic product; GDP; natural capital; sustainability. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijsuse:v:11:y:2019:i:3:p:258-272

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