Natural resources, economic growth and geography

Abstract

In this paper we discuss the relationship between economic growth and natural resources at a global level, taking into account geography. With this aim, our model integrates elements of the theories of endogenous growth, natural resources and new economic geography. We find that an increase in the world growth rate can lead to a higher depletion of the natural resources following an increase in the world demand due to expansion in population. However, the consideration of geography and growth mechanisms make the relationship between growth and natural resources more complex, and can even lead to the opposite conclusion when the forces behind growth are different from world demand. Indeed, either a reduction in transport costs or an increase in R&D productivity appears to be able to generate a faster growth compatible with a lower depletion of natural resources. Abstract:In this paper we discuss the relationship between economic growth and natural resources at a global level, taking into account geography. With this aim, our model integrates elements of the theories of endogenous growth, natural resources and new economic geography. We find that an increase in the world growth rate can lead to a higher depletion of the natural resources following an increase in the world demand due to expansion in population. However, the consideration of geography and growth mechanisms make the relationship between growth and natural resources more complex, and can even lead to the opposite conclusion when the forces behind growth are different from world demand. Indeed, either a reduction in transport costs or an increase in R&D productivity appears to be able to generate a faster growth compatible with a lower depletion of natural resources.

Productive Capacities, Economic Growth and Economic Growth Volatility in Developing Countries: Does Structural Economic Vulnerability Matter?

“…Some authors (e.g., Ding and Field, 2005;Brunnschweiler and Bulte, 2008) have made a distinction between the concepts of "natural resource abundance" and "natural resource dependence", and provided empirical evidence that what really triggers the resource curse is the excessive dependence on natural resources or resource-based industries rather than the abundance in natural resources per se. While many studies have confirmed the resource-curse hypothesis, this negative effect may be mitigated or even turn out to be positive depending on several factors, including for example, the level of human capital accumulation and the institutional quality (e.g., Qiang and Jian, 2020;Zallé, 2019), whether there exist lower transports costs and encouragement of innovation (e.g., González-Vala and Pueyo, 2019), and if natural resource rents are used to promote export diversification, including through resource-based industrialization (e.g., Djimeu and Omgba, 2019;Massol and Banal-Estañol, 2014;Ross, 2019).…”

Do agglomeration economies matter where natural endowments are? Lessons from Greece

“…For the tourism industry, sea access is one of the prerequisites for attracting mass tourism. Harada (1964), Gallup, Sachs, and Mellinger (1999), Gómez Martín (2005) and González‐Val and Pueyo (2019), among others, have examined the role of climate. Harada (1964) argued for the importance of climate in the establishment of industrial activities, stating that extreme temperatures have an adverse effect on the human mind and body, while moderate climates are more likely to be ideal for human industrial activities.…”

“…The third element is what Adam Smith mostly focused on, in 1776, and many theorists still focus on today: the existence or adequacy of natural resources 1 . Their importance for the location of economic activity lies in the fact that they are not evenly distributed worldwide, nor even in a territory of any particular country, but they are usually concentrated in specific areas of the world, which, however, do not necessarily coincide with the areas incorporated into production (González‐Val & Pueyo, 2019). Natural resources are considered to be a key factor for the clustering of economic activities in specific areas.…”

Does Altitude and Forest Density Affect Economic Growth? a Case Study of Kalimantan Barat

“…Natural resources also drive economic growth as the raw material for carrying out all production steps (Indajani & Pawestri, 2018). The main feature of natural resources is its heterogeneous geographical distribution, so it becomes essential to consider economic growth studies (González-Val & Pueyo, 2019). Their accessibility is more often than not concentrated in a few regions of the world which don't continously coincide with the locales in which they are joined within the generation, so there should be geographical examination in producing significant exchange volumes, which specifically influence development within the locale and the national economy (Kartiasih, 2019).…”