FDI and Forest Depletion

Ahmet, Duncan, Nazar

How Green Was My Valley…

• Pre-Industrial Revolution

• Industrial Revolution

• Post-Industrial Revolution

Foreign Direct Investment

• Question

• Independent and dependent variables

• Hypothesis

Methodology

• Non-random selection?• FDI inflow not random• Cases

– Liberia: HH– China: LL– Uganda: HL NFD

• Counter-factuals

Dependent Variable

• Net Forest Depletion (NFD) from WDI– NFD as %of GDP

• NET FOREST DEPLETION = [(UNIT RESOURCE RENTS)× (EXCESS ROUNDWOOD HARVEST)]- NATURAL GROWTH

___________________________________GDP

– NFD in 2005 US $ » NFD in current US $ adjusted to inflation by

GDP deflator (base year by country)

GDP deflator + year GDP deflator/100

New GDP deflator x NFD in current US $

= NFD in 2005 $

Control Variables

• GINI Coefficient/Index• Population growth (annual %)• Urban population growth (annual %)• Agricultural land (% of lad area)• Forest area (% of land area)• DEMOCRACY!!!

Independent Variable

• FDI net inflows, as % of GDP• FDI net inflows, BoP current US$

Data

• 2271 Observations• From 183 countries• Between 1990-2012• Lots of missing NFD data

– e.g Brazil

Basic Correlation Results

Regression Results

Panel Data Estimators

Multiple Imputation

Hausman Test Results

LM Test Results