Asymmetric linkage between copper-cobalt productions and economic growth: Evidence from Republic Democratic of Congo

Abstract

This study analyzed the nonlinear asymmetric link between copper-cobalt productions on economic development, and to which extent these variables exert growth concerning capital and labor in the Democratic Republic of Congo (DRC) for 26 years. Correlation, unit root, and cointegration tests were used for the testing framework, while nonlinear Autoregressive Distributed Lags, causality test, variance decomposition, and impulse response analysis were employed for the estimation framework. The main findings showed a strong correlation between variables, and selected variables integrated in 1st order, indicate the availability of long-run cointegration relations. The long-run nonlinear asymmetric relationships were noted between economic growth and both shocks (positive and negative) to copper and negative shock to cobalt production. Capital has the highest extent of economic growth, copper contributes more than cobalt, while labor is the least contributor to economic growth in terms of variations. This study suggested the potential policy implications, which can reflect on the possible cause-led nonlinear and negative impact of the mining sector on economic growth, and strengthen the link between copper and cobalt production and growth concerning micro-economic indicators.