Impact of forest certification on the growth of exports in Chile

Thesis MSC
1 January 2014

We investigate and compare the growth of export relationships of Chilean forestry companies based on intensive and extensive margins. In turn each margin consists of new export relationships (extensive margin), Survival and Deepening (intensive margin). One risk that an exporter faces during its early years are short-lived relationships, Pursa and Besedes (2010) attribute this behavior to the existence of uncertainty and imperfect information regarding the costs that firms acquire when inserted in destination countries. To examine the performance and growth of export relationships, the forest certification Forest Stewardship Council -FSC- is identified as a mechanism for reducing uncertainty due to its importance and international acceptance. This certification will allow companies to settle in destination countries permanently, according to the literature reviewed, this is the first study of its kind to determine which of the margins is more effective and better explains the performance of export relationships. When analyzing the survival rates and deepening export relations of FSC certified forestry companies and non-certified companies, the results allow us to conclude that the impact of FSC is significant, showing a relatively greater deepening compared to uncertified companies, and a great importance of the extensive margin throughout the period.

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Publication | 29 October 2014