Faculty of Economics and Management, University Putra Malaysia, Serdang, Selangor, Malaysia; Department of Economics, Bauchi State University Gadau, Bauchi State, Nigeria
Sulaiman, C., Faculty of Economics and Management, University Putra Malaysia, Serdang, Selangor, Malaysia, Department of Economics, Bauchi State University Gadau, Bauchi State, Nigeria; Abdul-Rahim, A.S., Faculty of Economics and Management, University Putra Malaysia, Serdang, Selangor, Malaysia
In 1989, unnecessary logging activities triggered huge landslides in Thailand that led to the loss of 373 human lives and properties worth millions of baht. Consequently, Thailand's authorities officially imposed a logging ban to forestall the future reoccurrence of a similar disaster. Using a J-curve hypothesis, this paper examined the impact of the logging ban on Thailand's forest product trade balances. To achieve the objective, an autoregressive distributed lag approach to cointegration was applied to estimate the results using data from 1971 to 2010. The results revealed that the policy has had a negative effect on product trade balances in the short-run and the long-run. In addition, domestic income, foreign income and the exchange rate were found to significantly influence product trade balance variations. The J-curve effect was non-existent for all of the sampled products. As such, policies that will both safeguard the environment and ensure economic growth are recommended. © Copyright 2015 Inderscience Enterprises Ltd.