The Dynamic Nonlinear Effect of Urban Intensity on Natural Resources in Indonesia

economic growth in natural resources using a time series data from
1971 to 2018. The current study applied a novel methodology of
nonlinear ARDL proposed by Shin et al. (2014). This methodology
is ideal to answer the asymmetric effect on the independent variable
on the dependent variable. Furthermore, we also applied
asymmetric Granger causality introduced by Hatemi-J (2012) to
confirm the causal relationship between the variables. The results
of NARDL affirmed that all the variables have a significant impact
on natural resources rent. The findings confirm that negative shocks
of urban intensity decrease the natural resources rents; however, the
positive shocks increase the rents of natural resources. On the one
hand, the positive and negative shocks of GDP increase the natural
resources though, the magnitude of positive shocks are significantly
different from the negative shocks. On the other hand, the results of
asymmetric Granger causality confirm that positive and negative
shock of urban intensity does granger cause positive shocks of
natural resources. Whereas, positive shocks of natural resources
(economic growth) have a causal connection with positive and
negative shocks of economic growth (natural resources) in
Indonesia.