THE IMPACT OF FOREST WOOD PRODUCTS EXPORTS ON DEFORESTATION:

THE CASE STUDY OF SOUTH ASIA

Waqas

Department of Economics, Kohat University of Science and Technology, Kohat

*Corresponding Author Email: Waqas4401@gmail.com

Abstract

Forests have profound impact on aggregate economy in terms of sustainability, friendly eco-
system, and conducive environment for economic development and prosperity.. Initially, the
forest was used for fire purposes to cook meals in primitive times. Over time, the demands of
forestry increased to decorate houses and official installations. Subsequently, the export of trees,
wood and unique forests began to meet the demand of the international market. This has led to
deforestation specifically in South Asia due to varying environmental phases and humidity.
Trees have a demand that has evolved throughout history. The regular export of trees from one
country to another significantly impacted tree growth, which resulted in deforestation. The
continued export of trees has not only impacted the world's climate, but it has also led to global
warming. The real objective of this study is to analyze the impact of forest exports on
deforestation in South Asia. The study had applied Panel ARDL estimation methodology for the
period 2001-2020 to assess the long and short run relationship. In addition, this study has used
second generation unit root test for stationary of the data and VECM Granger causality test for
checking the direction of causality. Firstly, the results of Panel ARDL test indicate that the forest
exports, tourism, urbanization and economic activities has positive impact on the deforestation
while Foreign debts have negatives impact on deforestation in the long run. The results show that
a 1% increase in forest exports, tourism, urbanization and economic activities will lead to
increase 0.07%, 0.29%, 9.12% and 3.36% increase in deforestation respectively. But 1% increase
in foreign debts will decrease the deforestation by 1.86%. On the other hand, the results of the
VECM Granger causality show that there is a one-way causality i.e. forest exports, urbanization,
and tourism cause deforestation in South Asia. On the contrary, a two-way causality relationship
found between GDP and deforestation.
Keywords: South Asia, Deforestation, Forest exports, Panel ARDL, Unit root, VECM.