The study of impact factors on timber trade between Ghana and China

Abstract

PurposeTimber export is an important economic development pillar in Ghana, which has a direct effect on Ghana’s domestic forestry industry development, local communities’ income and sustainable forest management and deforestation. China, as the Ghana’s largest timber export destination, brought significant impacts on Ghana’s timber export. However, there is a lack of quantitative analyses on impact factors of timber trade between the two countries in the past, which this paper sought to do.Design/methodology/approachThe authors first collected Ghana’s timber exports to China from 1997 to 2017, and then based on the literature review and trade theories, the authors set up a least squares estimate (LSE)-based multiple linear regression (MLR) model to analyse the specific impact factors. In addition, multi-collinearity, autocorrelation and heteroscedasticity issues of the impact factors were checked to guarantee the accuracy of the results.FindingsThe results showed China timber import volume, Ghana cedi (GHC)/US$ exchange rate, Ghana’s gross domestic product (GDP) and China timber consumption volume in construction sector had positive impacts; Ghana timber production volume and Ghana average timber export price had negative impacts. The results confirmed that China’s timber consumption had a positive linkage with Ghana’s timber export. The article also reviewed possible impacts caused by change in timber trade policies, which proved important but was hardly directly quantified. The authors pointed out the importance of optimizing these impact factors to make sure Ghana’s timber export to China went on the sustainable track.Originality/valueThere is no literature about timber trade and its impact factors between Ghana and China, which used econometric models. This paper provided new perspectives on the impact factors in timber trade between the two countries.