Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/239406 
Year of Publication: 
2020
Citation: 
[Journal:] Journal of Risk and Financial Management [ISSN:] 1911-8074 [Volume:] 13 [Issue:] 12 [Publisher:] MDPI [Place:] Basel [Year:] 2020 [Pages:] 1-9
Publisher: 
MDPI, Basel
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.
Subjects: 
economic growth
fixed effects
natural disasters
smooth coefficient
panel data models
JEL: 
O31
O44
Q47
Q54
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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