An Empirical Analysis of Relationships between Forest Resources and Economic and Green Performances in the European Union

Abstract

The growing concern for environmental sustainability drives efforts toward balancing economic growth with responsible resource management. Forests represent invaluable green assets central to combating climate change and supporting biodiversity. This research investigates the intricate interaction between forest resources and economic and green performances within the European Union (EU). The European Union, as a conglomerate of diverse member states with varying forest endowments and economic contexts, provides a rich framework for examining these connections. This paper applies structural equation modeling (SEM) and cluster analysis to a dataset collected from Eurostat. This study’s empirical findings underscore the multidimensional relationship between forest resources and green and economic performances. The findings reveal significant positive relationships between economic and green performances and forest resources and a negative relationship between greenhouse gas (GHG) emissions and forest resources, implying a decline in GHG while green and economic performances increase. Cluster analysis identifies distinct groups of EU countries exhibiting similar profiles concerning forest management and economic and green performances. The cluster analysis results highlight the necessity for tailored strategies and policy benchmarking that acknowledge the heterogeneity of EU member states and their unique combinations of forest resources, economic structures, and ecological commitments.