Exporting Forest Loss? A Cross-National Analysis of the United States Export–Import Bank Financing in Low- and Middle-Income Nations

Dependency theory argues that due to unequal economic relationships, including exports, multinational corporations, and loans from multilateral lending institutions, high-income nations exploit the labor and resources of low- and middle-income nations. We extend this line of reasoning to the United States Export–Import Bank, as it has recently come under scrutiny for its lending in the forestry sector of low- and middle-income nations. Although this concern has been raised, we are not aware of any cross-national research that empirically evaluates if their investments adversely impact forests. Therefore, we examine the impact of the United States Export–Import Bank lending in the forestry sector on forest loss. Using a two-stage instrumental variable regression model to account for possible donor selection bias as well as ordinary least squares regression to analyze data for 78 low- and middle-income nations, we find that export credit agency financing is related to increased forest loss from 2001 to 2014. Our findings are consistent with dependency theory ideas that economic linkages with high-income nations increase forest loss in low- and middle-income nations.