What has driven deforestation in developing ...

Using newly-released and globally available high resolution remote sensing data on forest loss, we update the assessment of the crosscountry determinants of deforestation in developing countries. We validate most of the major determinants found in the previous literature, generally based on earlier time-periods, except for the role of institutional quality. Agricultural trade, hitherto relatively neglected, is found to be one of the main factors causing deforestation. Focusing on the effect of international trade, we show that countries with different levels of relative forest cover react differently to a shock in agricultural exports value. We also emphasize that taking countries’ development into account may be critical in assessing global deforestation trends. The impact of trade is high in countries still endowed with a large proportion of forest cover while it is lower in countries with smaller remaining forest cover.