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Natural Capital Depletion: the Impact of Natural Disasters on Inclusive Growth

Darshana Rajapaksa, Moinul Islam () and Shunsuke Managi
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Darshana Rajapaksa: Kyushu University

Economics of Disasters and Climate Change, 2017, vol. 1, issue 3, No 2, 233-244

Abstract: Abstract The impact of natural disasters on inclusive growth has received little attention from empirical analyses compared to the attention focused on other growth parameters. Thus, this study considers country-level panel data (108 countries over 25 years) and estimates three econometric models to explore the nexus of natural capital depletion and climate-related natural disasters. The results indicate that the impact is nonlinear: there is an inverted ‘U’ shape for small-to-medium level disasters in which natural capital depletion is increasing. The impact of natural disasters is higher when the magnitude of resource depletion is lower or higher. Similarly, trade openness, FDI and GDP growth rate are other important determinants of natural capital. This paper provides insights into how sustainable development can be pursued by means of conserving natural resources in the face of frequent climate-related disasters. It particularly emphasizes the importance of considering small-to-medium size disasters and the threat of disaster in countries with low levels of natural capital depletion.

Keywords: Natural capital; Disaster; Inclusive growth; Sustainability; Semi-parametric panel fixed effect model; Fixed effect; Quantile regression (search for similar items in EconPapers)
JEL-codes: O11 O13 O44 Q2 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s41885-017-0009-y

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