Environmental risk, natural disasters, and economic growth management in Indonesia: A satellite-based analysis
DOI:
https://doi.org/10.12928/optimum.v16i2.15927Keywords:
Environmental Risk, Economic Growth, Satellite-Based AnalysisAbstract
This study examines how environmental risk and natural disasters affect economic performance in a disaster-prone emerging economy. It focuses on the short-run and long-run impacts of flood exposure, forest loss, and spatial economic expansion on Indonesia’s economic growth, with implications for investment stability and growth management. The study integrates satellite-based indicators of flood exposure, forest loss, and night-time light intensity with national time-series macroeconomic data for Indonesia over the period 1960–2024. These variables are analyzed using a dynamic time-series framework to capture both short-run adjustments and long-run equilibrium relationships between environmental risk and economic performance. The results show that environmental factors affect economic performance in differentiated ways. Forest loss exhibits a statistically significant long-run association with economic growth, reflecting the continued role of land conversion and resource utilization in Indonesia’s development process. In contrast, disaster-related indicators do not display robust long-run negative effects at the aggregate level, suggesting that adaptive mechanisms such as reconstruction activity and economic diversification mitigate their macroeconomic impact. Short-run effects of environmental variables are generally limited. This study contributes to the business and management literature by reframing environmental risk as a structural constraint on economic performance and investment stability. By integrating satellite-based environmental data into macroeconomic analysis, it provides a novel, management-oriented framework for assessing disaster-related economic risk in emerging economies.
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