Implications of Trade and Trade Adjustment on Forest Transition in Africa and Asia: Based on FMOLS and DOLS Approaches
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Beijing Forestry University China
Department of Economics, Karakorum International University, Gilgit, Pakistan
The China Western Economic and Research Center, Southwestern University of Finance and Economics, Chengdu, Sichuan, China
Institute of Commerce Sindh University Jamshoro Pakistan
Planning and Development Department Gilgit-Baltistan
University of Economics and Business, Vietnam National University, 144 Xuan Thuy, Hanoi, Vietnam
Submission date: 2022-02-26
Final revision date: 2022-03-15
Acceptance date: 2022-03-29
Online publication date: 2022-07-13
Publication date: 2022-09-01
Pol. J. Environ. Stud. 2022;31(5):4003-4018
In Asian and African countries, the state of economic globalization has been distinct from developed countries since the 1980s. Existing literature focused mainly on trade in forest goods, but this study focused on trade and trade adjustment in Asian and African countries on forest cover change dynamics. To this end, we used Fully Modified Least Square (FMOLS) and Dynamic Ordinary Least Square (DOLS) estimators to investigate the impact of trade and adjustment of trade structure on forest transition in Asian and African panels over the period 1990-2016. Our findings show that trade and trade adjustment indicators such as the percentage of non-primary goods in total exports (PNPEXP), total exports of manufacturing and service goods (TEXP), imports of forest goods (IMFG), and imports of agricultural goods (IMAG) have a positive and significant impact on forest cover in Asian and African countries. The causality test results also confirm that unidirectional causality runs from forest cover to PNPEXP, TEXP, IMAG, and IMFG. Bi-directional causality is found between IMFG and IMAG. We can conclude that Asian and African countries can improve their forest cover by adopting modern trade and trade adjustment strategies.
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