Abstract: Reserve forest area plays a crucial role in preserving ecological balance, while Russia possesses the highest amount of forest reserves in the world. The abrupt transformation of the economic system casted various challenges including unestablished forestry legislation, mal-governance, and unleashed privatization. We investigate the role of institutional quality in explaining deforestation by using panel-time series data for seventy-five Russian regions over 2009-2019. We apply one-way autoregressive fixed-effect with Driscoll-Kraay standard errors due to the spatial-dependency and time lags across Russian regions. The findings affirm the hypothesis of Environmental Kuznets Curve (EKC) for deforestation implying that after surpassing threshold point of GRP per capita, deforestation decreases. Importantly, poor institutional quality aggravates deforestation rate. Our findings about impact of institutional quality are robust considering timber harvesting volumes. The finding affirms our proposition that Russian forestry preservation policy is somewhat effective in reducing deforestation rate. The empirical findings reinforce the importance of enabling institutional quality for preserving forests area towards carbon sequestration and overall sustainable development goal agendas.

Cite: Mariev O.S.
Economic Growth, Institution and Deforestation: Evidence from Russian Regions
2nd International Conference on Econometrics and Business Analytics (iCEBA): Time series methods 08-10 Sep 2022