Assessing the Role of Forest Certification and Macroeconomic Indicators on Croatian Wood Exports to the EU: A Panel Data Approach

Abstract

In the wood industry, forest certification stands as a pivotal factor that supports the implementation of sustainability and market acceptance. Recognizing its significance for both the wood sector and exports, this study explores the impact of Forest Stewardship Council (FSC) Chain of Custody certificates on the export of Croatian wood to European Union (EU) countries. Through a dynamic panel data analysis using the system Generalized Method of Moments (GMM) estimator, our aim is to uncover the implications of this certification on wood industry exports. Additionally, the model assesses other determinants of wood exports, such as GDP, GDP per capita, remoteness, manufacturing value added, unemployment, and the real effective exchange rate. The results indicate that the number of FSC certificates during the observed period (2000–2021) have a positive and significant impact on wood exports from Croatia, suggesting that wood certification plays a predominant role in shaping such exports. Furthermore, the econometric analysis confirms the statistical significance of selected macroeconomic indicators, including nominal Gross Domestic Product (GDP), GDP per capita, unemployment, added value of manufacturing and real effective exchange rate, on wood exports. This study emphasizes the importance of forest certification in promoting wood exports and improving market competitiveness, offering a unique contribution to the literature by considering a range of macroeconomic factors in the analysis.