Impact of Government Stability and Investment Profile on Forest Area: The Role of Natural Protected Areas

Forest area plays a fundamental role in air and water quality and directly impacts agricultural productivity. This research aims to examine the impact of government stability and investment profiles on forest cover in countries within the ASEAN region. Specifically, the research includes Brunei Darussalam, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. In the research development, we examine the role which protected natural areas play in the conservation of forests. We employ second-generation cointegration methods of cross-section dependence and slope heterogeneity. The results suggest that forest cover has been significantly reduced in this region, while government stability and the investment profile have a volatile behavior. The second-generation cointegration test results suggest there is no long-term relationship between the three series. Likewise, the short- and long-term elasticities highlight the importance of environmental protection policies to conserve forests.