The Dynamic Nonlinear Effect of Urban Intensity on Natural Resources in Indonesia: Evidence from Asymmetric ARDL and Causality Approaches

摘要

The aim of this study is to explore the role of urbanization andeconomic growth in natural resources using a time series data from1971 to 2018. The current study applied a novel methodology ofnonlinear ARDL proposed by Shin et al. (2014). This methodologyis ideal to answer the asymmetric effect on the independent variableon the dependent variable. Furthermore, we also appliedasymmetric Granger causality introduced by Hatemi-J (2012) toconfirm the causal relationship between the variables. The resultsof NARDL affirmed that all the variables have a significant impacton natural resources rent. The findings confirm that negative shocksof urban intensity decrease the natural resources rents; however, thepositive shocks increase the rents of natural resources. On the onehand, the positive and negative shocks of GDP increase the naturalresources though, the magnitude of positive shocks are significantlydifferent from the negative shocks. On the other hand, the results ofasymmetric Granger causality confirm that positive and negativeshock of urban intensity does granger cause positive shocks ofnatural resources. Whereas, positive shocks of natural resources(economic growth) have a causal connection with positive andnegative shocks of economic growth (natural resources) inIndonesia.