IDEAS home Printed from https://ideas.repec.org/a/eee/apmaco/v273y2016icp290-307.html
   My bibliography  Save this article

Optimal dynamics in a two-sector model with natural resources and foreign direct investments

Author

Listed:
  • Antoci, Angelo
  • Ragni, Stefania
  • Russu, Paolo

Abstract

In this paper we analyze the optimal dynamics in an economy with three factors of production which are labor, a renewable natural resource and physical capital, and two sectors, i.e. the industrial sector and the local sector. External investors invest in the industrial sector as long as the return on the invested capital is higher than in the other economies. The activity of the industrial sector generates a negative impact on the environmental resource. In this context, we show that external investments may generate path-dependent economic dynamics. More specifically, three stationary states may coexist, two saddle points and a repellor. Furthermore, the time evolution of the stock of the environmental resource is monotonic; that is, a U-shaped path (i.e. the environmental Kuznets curve) cannot be observed along which the stock is initially decreasing and then becomes definitively increasing.

Suggested Citation

  • Antoci, Angelo & Ragni, Stefania & Russu, Paolo, 2016. "Optimal dynamics in a two-sector model with natural resources and foreign direct investments," Applied Mathematics and Computation, Elsevier, vol. 273(C), pages 290-307.
    • Handle: RePEc:eee:apmaco:v:273:y:2016:i:c:p:290-307
    DOI: 10.1016/j.amc.2015.09.015
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0096300315012333
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.amc.2015.09.015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Heath, John & Binswanger, Hans, 1996. "Natural resource degradation effects of poverty and population growth are largely policy-induced: the case of Colombia," Environment and Development Economics, Cambridge University Press, vol. 1(1), pages 65-84, February.
    2. Angelo Antoci & Paolo Russu & Elisa Ticci, 2014. "Rural Poor Economies and Foreign Investors: An Opportunity or a Risk?," PLOS ONE, Public Library of Science, vol. 9(12), pages 1-24, December.
    3. Mercenier, Jean & Michel, Philippe, 1994. "Discrete-Time Finite Horizon Appromixation of Infinite Horizon Optimization Problems with Steady-State Invariance," Econometrica, Econometric Society, vol. 62(3), pages 635-656, May.
    4. Farhani, Sahbi & Mrizak, Sana & Chaibi, Anissa & Rault, Christophe, 2014. "The environmental Kuznets curve and sustainability: A panel data analysis," Energy Policy, Elsevier, vol. 71(C), pages 189-198.
    5. Diele, F. & Marangi, C. & Ragni, S., 2011. "Exponential Lawson integration for nearly Hamiltonian systems arising in optimal control," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 81(5), pages 1057-1067.
    6. Duarte, Rosa & Pinilla, Vicente & Serrano, Ana, 2013. "Is there an environmental Kuznets curve for water use? A panel smooth transition regression approach," Economic Modelling, Elsevier, vol. 31(C), pages 518-527.
    7. López, Ramón, 2010. "Sustainable economic development: on the coexistence of resource-dependent and resource-impacting industries," Environment and Development Economics, Cambridge University Press, vol. 15(6), pages 687-705, December.
    8. Ragni, Stefania & Diele, Fasma & Marangi, Carmela, 2010. "Steady-state invariance in high-order Runge-Kutta discretization of optimal growth models," Journal of Economic Dynamics and Control, Elsevier, vol. 34(7), pages 1248-1259, July.
    9. Ning Chang, 2012. "The empirical relationship between openness and environmental pollution in China," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 55(6), pages 783-796, August.
    10. Choumert, Johanna & Combes Motel, Pascale & Dakpo, Hervé K., 2013. "Is the Environmental Kuznets Curve for deforestation a threatened theory? A meta-analysis of the literature," Ecological Economics, Elsevier, vol. 90(C), pages 19-28.
    11. Sahbi Farhani & Sana Mrizak & Anissa Chaibi & Christophe Rault, 2014. "The Environmental Kuznets Curve and Sustainability: A Panel Data Analysis," CESifo Working Paper Series 4787, CESifo.
    12. Barbier, Edward B., 2010. "Poverty, development, and environment," Environment and Development Economics, Cambridge University Press, vol. 15(6), pages 635-660, December.
    13. Johanna Choumert & Pascale Combes Motel & K. Hervé Dakpo, 2013. "Is the Environmental Kuznets Curve for deforestation a threatened theory? A meta-analysis of the literature," Post-Print halshs-00806629, HAL.
    14. Antoci, Angelo & Russu, Paolo & Ticci, Elisa, 2012. "Environmental externalities and immiserizing structural changes in an economy with heterogeneous agents," Ecological Economics, Elsevier, vol. 81(C), pages 80-91.
    15. Bartolini, Stefano & Bonatti, Luigi, 2002. "Environmental and social degradation as the engine of economic growth," Ecological Economics, Elsevier, vol. 43(1), pages 1-16, November.
    16. Antoci, Angelo & Bartolini, Stefano, 2004. "Negative externalities, defensive expenditures and labour supply in an evolutionary context," Environment and Development Economics, Cambridge University Press, vol. 9(5), pages 591-612, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Angelo Antoci & Paolo Russu & Elisa Ticci, 2011. "Investement inflows and sustainable development in a natural resource-dependent economy," Department of Economic Policy, Finance and Development (DEPFID) University of Siena 0311, Department of Economic Policy, Finance and Development (DEPFID), University of Siena.
    2. Stavros Tsiantikoudis & Eleni Zafeiriou & Grigorios Kyriakopoulos & Garyfallos Arabatzis, 2019. "Revising the Environmental Kuznets Curve for Deforestation: An Empirical Study for Bulgaria," Sustainability, MDPI, vol. 11(16), pages 1-16, August.
    3. Antoci, Angelo & Borghesi, Simone & Russu, Paolo & Ticci, Elisa, 2015. "Foreign direct investments, environmental externalities and capital segmentation in a rural economy," Ecological Economics, Elsevier, vol. 116(C), pages 341-353.
    4. Malerba, Daniele, 2020. "Poverty alleviation and local environmental degradation: An empirical analysis in Colombia," World Development, Elsevier, vol. 127(C).
    5. Menegaki, Angeliki N. & Tsagarakis, Konstantinos P., 2015. "Rich enough to go renewable, but too early to leave fossil energy?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 1465-1477.
    6. Ourvashi Bissoon, 2018. "A modified EKC for sustainability assessment in Sub-Saharan Africa: A panel data analysis," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 51-68,69-83.
    7. Touitou Mohammed, 2021. "Empirical Analysis of the Environmental Kuznets Curve for Economic Growth and CO2 Emissions in North African Countries," Econometrics. Advances in Applied Data Analysis, Sciendo, vol. 25(2), pages 67-77, June.
    8. Olimpia Neagu, 2019. "The Link between Economic Complexity and Carbon Emissions in the European Union Countries: A Model Based on the Environmental Kuznets Curve (EKC) Approach," Sustainability, MDPI, vol. 11(17), pages 1-27, August.
    9. Miyamoto, Motoe & Mohd Parid, Mamat & Noor Aini, Zakaria & Michinaka, Tetsuya, 2014. "Proximate and underlying causes of forest cover change in Peninsular Malaysia," Forest Policy and Economics, Elsevier, vol. 44(C), pages 18-25.
    10. Agboola, Mary Oluwatoyin & Bekun, Festus Victor & Joshua, Udi, 2021. "Pathway to environmental sustainability: Nexus between economic growth, energy consumption, CO2 emission, oil rent and total natural resources rent in Saudi Arabia," Resources Policy, Elsevier, vol. 74(C).
    11. repec:ipg:wpaper:2014-496 is not listed on IDEAS
    12. Chien, Fengsheng & Anwar, Ahsan & Hsu, Ching-Chi & Sharif, Arshian & Razzaq, Asif & Sinha, Avik, 2021. "The role of information and communication technology in encountering environmental degradation: Proposing an SDG framework for the BRICS countries," Technology in Society, Elsevier, vol. 65(C).
    13. Kere, Eric Nazindigouba & Choumert, Johanna & Combes Motel, Pascale & Combes, Jean Louis & Santoni, Olivier & Schwartz, Sonia, 2017. "Addressing Contextual and Location Biases in the Assessment of Protected Areas Effectiveness on Deforestation in the Brazilian Amazônia," Ecological Economics, Elsevier, vol. 136(C), pages 148-158.
    14. Aldona Standar & Agnieszka Kozera & Łukasz Satoła, 2021. "The Importance of Local Investments Co-Financed by the European Union in the Field of Renewable Energy Sources in Rural Areas of Poland," Energies, MDPI, vol. 14(2), pages 1-23, January.
    15. Chao Zhang & Ruifa Hu, 2020. "Does Fertilizer Use Intensity Respond to the Urban-Rural Income Gap? Evidence from a Dynamic Panel-Data Analysis in China," Sustainability, MDPI, vol. 12(1), pages 1-15, January.
    16. Azad Haider & Muhammad Iftikhar ul Husnain & Wimal Rankaduwa & Farzana Shaheen, 2021. "Nexus between Nitrous Oxide Emissions and Agricultural Land Use in Agrarian Economy: An ARDL Bounds Testing Approach," Sustainability, MDPI, vol. 13(5), pages 1-19, March.
    17. Hüseyin İçen, 2020. "Environmental Kuznets Curve in D8 Countries: Evidence from Panel Cointegration," EKOIST Journal of Econometrics and Statistics, Istanbul University, Faculty of Economics, vol. 0(32), pages 85-96, June.
    18. Karine Constant & Natacha Raffin, 2016. "Environnement, croissance et inégalités : le rôle particulier du canal de la santé," Revue française d'économie, Presses de Sciences-Po, vol. 0(3), pages 9-29.
    19. Sonia SCHWARTZ & Jean Galbert ONGONO OLINGA & Eric Nazindigouba KERE & Pascale COMBES MOTEL & Jean-Louis COMBES & Johanna CHOUMERT & Ariane Manuela AMIN, 2014. "A spatial econometric approach to spillover effects between protected areas and deforestation in the Brazilian Amazon," Working Papers 201406, CERDI.
    20. Omri, Anis, 2018. "Entrepreneurship, sectoral outputs and environmental improvement: International evidence," Technological Forecasting and Social Change, Elsevier, vol. 128(C), pages 46-55.
    21. Figueroa, Daniela & Galeana-Pizaña, J. Mauricio & Núñez, Juan Manuel & Anzaldo Gómez, Carlos & Hernández-Castro, J. Roberto & Sánchez-Ramírez, María del Mar & Garduño, Andrea, 2021. "Assessing drivers and deterrents of deforestation in Mexico through a public policy tool. The adequacy of the index of economic pressure for deforestation," Forest Policy and Economics, Elsevier, vol. 133(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:apmaco:v:273:y:2016:i:c:p:290-307. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/applied-mathematics-and-computation .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.