1 Introduction

The Forest Stewardship Council (FSC), founded in 1993, is an independent, non-profit non-governmental organization (NGO) established to promote the responsible management of the world’s forests. The certification process to FSC is carried out by accredited independent third parties such as Bureau Veritas Certification (http://www.bureauvitas.com) FSC chain of custody (CoC) certification is an integral part of FSC forest certification. FSC forest certification also includes FSC forest management certification. FSC CoC certification has been specifically designed for wood products. Its objective is to assure that the wood or the forest product purchased can be tracked accurately back to its source in the forest. Its concept is to ensure that certified wood products really come from an environmentally certified source (Upton and Bass 1996; Viana et al. 1996; Vogt et al. 2000). FSC CoC certification is a voluntary program based on the belief that consumers of wood products are likely to prefer products from organizations committed to protect the natural environment (Miles and Covin 2000; Styles et al. 2012). FSC CoC certification is expected to improve forest management by providing participating companies with marketing incentives and an access to niche markets or price premiums (Upton and Bass 1996; O’Brien and Teisl 2004; Aguilar and Vlosky 2007; Aguilar and Cai 2010; Yamamoto et al. 2014). Many companies in some countries have applied FSC CoC certification. Henrya and Tysiachnioukb (2018) analyzed Russia’s response to the standards of FSC CoC certification. Pinto and McDermott (2013) used a case study to examine the application of FSC CoC certification in Brazil. Espinoza et al. (2012) checked the application benefit of FSC CoC certification for U.S. hardwood lumber manufacturers. Riera et al. (2007) analyzed the application of FSC CoC certification in Spain.

FSC CoC certification has an impact on the international trade of wood products. Its traceability system for capturing, processing and providing consumer relevant information about wood products enables certified wood products to successfully enter the European and American markets, because these products meet the requirements of sustainability or legality (Vidal et al. 2005; Owari et al. 2006; McDermott 2012; Brack 2014; McDermott et al. 2015; Guan and Gong 2015), and it also enables companies to establish new business relationships with a consequent increase in sales and increase in their benefits (Galati et al. 2017; Marasenia et al. 2017; Guan and Xu 2018). While some scholars suggested that the FSC CoC certification has become a new trade barrier. Guan et al. (2010) analyzed the substitution relationship on certification and duty through an empirical analysis. Eriksson et al. (2007) suggested that FSC CoC certification influences the international competition of the Swedish forestry sector. Qiu and Yang (2007) pointed out that FSC CoC certification weakens the competitiveness of China’s wood products and greatly affects their exports. Gan (2005) used the CGE (computable general equilibrium) model to analyze the impact of FSC forest certification on international trade of forest products, and he suggested that the FSC CoC certification undermines the balance of global trade in forest products.

The impacts of FSC CoC certification on the trade of wood products has been studied extensively. While some studies suggest that FSC CoC certification has hindered the trade of wood products, others suggest that FSC CoC certification promotes the trade of wood products. However, previous research mainly considered the impacts of FSC CoC certification on the bilateral trade of wood products (Marasenia et al. 2017; Tricallotis et al. 2018), and analyses of the impacts on the global trade using the factor endowment theory of trading region are few. The comparative advantage of a country is determined by its endowments of the factors of production (land, labor, and capital). A country is said to have comparative advantages in goods that are produced with factors of production that are locally abundant (Toit et al. 2010; Verter 2016). This is because the profitability of goods is related to the input costs. The lower the input costs, the more profitable is the production of the goods. It is cheaper to produce goods from inputs that are locally abundant than to produce goods from inputs that are scarce (Feenstra 2004). In reality, FSC CoC certification promotes the sustainable supply of roundwood, which enables the certified wood products to better meet environmental requirements and obtain a greater share of the world market (Archer et al. 2005). However, certification also increases the input costs and reduces the comparative advantage of a country’s wood products (Schwarzbauer and Rametsteiner 2001; Perera and Vlosky 2006; Ebeling and Yasue 2009).

FSC CoC certification has become an effective tool to govern illegal logging (Hackett 2013; Carodenuto and Cerutti 2014; Niedziałkowski and Shkaruba 2018; Buliga and Nichiforel 2019), and certified wood products naturally meet the legal requirements (Brack 2014). All efforts against illegal logging have led to a decline in illegal logging in the world (Lawson and MacFaul 2010), and have contributed towards the increase in net trade of wood products (Guan et al. 2018). However, until now, there is no literature focused on the analysis of the impact of FSC CoC certification on the global trade of wood products. The aim of this paper is to examine the impact of the adoption of FSC CoC certification on the global trade of wood products. The analysis was conducted using the Heckscher–Ohlin–Vanek (HOV) model, where the number of FSC CoC certificates is used to describe the level of application, and is included as an explanatory variable for national net export of wood products. In the next section, the status of FSC CoC application in the world is introduced. Section 3 provides an introduction of trade of wood products. Section 4 introduces the method and data used in this study. Section 5 presents the model estimation results and discussion. Section 6 describes the limitation of the study. The last section provides a summary and the conclusion of this paper.

2 FSC CoC certification

Since CoC certification was proposed, the number of certificates has increased gradually as a number of companies have started to apply it. The number of FSC CoC certificates is greater than that of PEFC (Programme for the Endorsement of Forest Certification) CoC certificates. According to the statistics obtained from the websites of FSC and PEFC, by the end of 2017, the number of FSC CoC certificates was 33350, and the number of countries involved was 121. The number of PEFC CoC certificates was 11484 with 72 countries involved (Table 1).

Table 1 Number of CoC certificates by certification system from 2008 to 2017
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FSC CoC certification is mainly applied in Europe, Asia and North America, of which Europe owns the largest number, and in 2017 the number reached 17741, accounting for more than 50% of the total number of certificates (Table 2).

Table 2 Number of FSC CoC certificates in different continents from 2012 to 2017
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FSC CoC certification has achieved a rapid development in some countries. At present, the FSC CoC certification is mainly applied in China, USA, UK, Germany, Italy, Poland, Netherlands, Japan, Brazil and Spain. In these ten countries, the number of certificates has reached 21012 in 2017, accounting for 62.6% of total certificates (Table 3). Some consumption countries such as USA, UK and Netherlands are the main countries applying the certification, processing countries such as China and Vietnam, and some production countries such as Brazil and Malaysia are also becoming the main countries applying these certifications.

Table 3 Top 10 countries applying FSC CoC certification in 2017
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3 Trade of wood products

Wood products in trade have grown rapidly under the increasing demand stimulated by the world economic growth. The status of trade in wood products is different in Asia, Africa, America, Europe and Oceania (Table 4).

Table 4 Status of the net export of wood products in different continents in 2016
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Table 4 shows that Asia is a net importer of round wood, sawn wood, veneer sheet and particleboard, and a net exporter of plywood, fibreboard and wood furniture. Africa is a net exporter of roundwood, particleboard and veneer sheet, and a net importer of sawnwood, fibreboard, wood furniture and plywood. The roundwood, sawnwood, particleboard and veneer sheet of the Americas show a net export, while its wood furniture, plywood and fibreboard show a net import. Europe is a net exporter of all these products except for veneer sheet. Oceania is a net exporter of roundwood, sawnwood, veneer sheet and fibreboard, and a net importer of plywood, particleboard and wood furniture. Table 5 lists the top 5 import and export countries of wood products in the global market in 2016.

Table 5 Top 5 import and export countries of wood products in 2016
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Table 5 shows that in the imports and exports of roundwood, China and Japan are the main importing countries, followed by the UK, India, and Australia. USA, New Zealand and the Russian Federation are the main exporting countries, followed by Vietnam and Australia. In the imports and exports of sawnwood, China and USA are the main importing countries, followed by Japan, UK and Germany. The USA is also the main exporting country, with an exporting amount accounted for 22.4% of the global share, and followed by Russia, Sweden, Germany and Finland, with their total exports accounted for 32.2% of the global market. In the imports and exports of veneer sheet, the USA is both the main importing and exporting country with a share of 11.7% and 11.2%, respectively of the global market. In terms of exports, the USA is closely followed by China, Canada, Ukraine and Germany. In terms of imports, it is followed by India, Germany, Italy and China. In the imports and exports of fibreboard, Germany and China are the main exporting countries with a share of 19.2% and 13.1%, respectively, while USA is the main importing country with a share of 12.8%. In the imports and exports of plywood, China is the main exporting country, and its exporting volume has accounted for 34.9% of the global market, this share is even higher than the total sum of Indonesia, Malaysia, the Russian Federation and Finland. USA and Japan are the main importing countries; their total importing share has exceeded the total sum of Germany, Korea and UK. In the imports and exports of particleboard, Canada is the main exporting country, followed by Austria, Germany, Romania and France. USA is the main importing country, followed by Germany, Italy, France and UK. In Table 5 some countries such as the USA, Japan and Germany export and import processed wood products. A possible reason for this is that these countries own relatively large domestic forest industries but a limited range of tree species. Therefore, it is necessary for them to import certain species of wood and processed wood products in order to cope with a desired range of production when exporting. Some other countries such as China and Austria have developed a large domestic forest industry, so they import roundwood and export processed products. Countries such as the Russian Federation and Australia with larger forest endowment export roundwood and import processed products. The rapid development of CoC certification in countries such as China, USA, UK and Germany has been one of the main factors that have contributed to these countries in controlling a large share of the global trade of wood products. A large part of the wood products provided by these countries are certified. These countries have in some ways influenced the gradual establishment of traceability systems of wood products.

4 Method and data

4.1 Methods

In general, the magnitude and direction in trade flows of forest products are determined by geography, size of economies, character of forest endowments and government policies. The classical trade theory states that trade happens due to differences among trading partners in their relative costs of production (Sen 2010; Panda et al. 2016). The gravity model estimates the pattern of international trade. The model has been an empirical success as it accurately predicts trade flows between countries for many goods and services (Baldwin and Taglioni 2007), but the basic form of the model consists of factors that have more to do with geography and spatiality (Deardorff 1998; Feenstra et al. 2001). One of the common relative factor abundance models is the Heckscher–Ohlin model. The Heckscher–Ohlin model presents the relationship between net trade, prices and resource endowments (Heckscher 1919; Ohlin 1933), and this model has had mixed success in empirical analyses (Estevadeordal and Taylor 2002). Although considered the basis for international trade theory (Moroney and Walker 1966), some scholars have criticized the model for its poor empirical performance (Maskus 1985; Bowen et al. 1987), but others have argued that these failures were partly due to inappropriate settings (James 1993). According to the Heckscher–Ohlin model, the net exports of a country for a given product are a positive function of its resource endowments and a negative function of its income. There are a number of assumptions underlying the Heckscher–Ohlin model (Prestemon and Buongiorno 1997): (i) there exist fixed factors between countries; (ii) markets are competitive, and there are no trade barriers; (iii) the same technology is universally accessible; and (iv) consumption changes the same way as income changes.

Based on Learner (1984), Bonnefoi and Buongiorno (1990), and Prestemon and Buongiorno (1997) studies, we learn that the main factor determining net trade of forest products is the size of a country’s forest endowment relative to the size of its economy. This approach has been prescribed by the Heckscher–Ohlin–Vanek (HOV) model (Vanek 1963). Assuming that country i has a balanced trade, that is where demand equals supply, the output of commodity j (Qij) is a function of forest endowments (Ei).

$${{\text{Q}}_{\text{ij}}} = {{\text{u}}_{\text{i}}} {{\text{E}}_{\text{i}}} ,$$
(1)

where u is a transformation coefficient (i.e., indicating the quantity of forest resource used per unit of output). If Eq. (1) holds for individual countries, it must also hold for the entire trading area. That is

$$\sum\limits_{{\text{i}}} {{\text{Q}}_{{\text{ij}} }} = \sum\limits_{{\text{i}}} {{\text{u}}_{{\text{i}}} {\text{E}}_{{\text{i}} }}.$$
(2)

The consumption of commodity j of a country (Cij) can be interpreted as:

$${\text{C}}_{\text{ij}} = {\text{S}}_{\text{i}} \sum\limits_{\text{i}} {{\text{Q}}_{\text{ij}} }$$
(3)

where Si is the consumption share of total output of a country in the trading area (Vanek 1968). From Eqs. (1) and (3) the net trade of country i can be interpreted as:

$${\text{T}}_{{\text{ij}}} = {\text{Q}}_{{\text{ij}}} - {\text{C}}_{{\text{ij}}} = {\text{u}}_{{\text{i}}} {\text{E}}_{{\text{i}}} - {\text{S}}_{{\text{i}}} \sum\limits_{{\text{i}}} {{\text{Q}}_{{\text{ij}} }} .$$
(4)

By using Eq. (2), Eq. (4) can be rewritten as:

$${\text{T}}_{\text{ij}} = {\text{u}}_{{\text{i}}} {\text{E}}_{\text{i}} - {\text{S}}_{\text{i}} \sum\limits_{{\text{i}}} {{\text{u}}_{{\text{i}}} {\text{E}}_{\text{i}} }$$
(5)

Equation (5) is also known as the HOV equation. Taking into consideration the factor-price equalization and identical homothetic preferences across countries, the consumption share of a country can be written as:

$${\text{S}}_{\text{i}} = {\text{Y}}_{\text{i}} /\sum\limits_{\text{i}} {{\text{Y}}_{\text{i}} }$$
(6)

where Y is income. Thus, Eq. (5) can be rewritten as:

$${\text{T}}_{\text{ij}} = {\text{u}}_{{\text{i}}} {\text{E}}_{\text{i}} - {\text{Y}}_{\text{i}} \left\{ {\sum\limits_{{\text{i}}} {{\text{u}}_{{\text{i}}} {\text{E}}_{\text{i}} /\sum\limits_{{\text{i}}} {{\text{Y}}_{\text{i}} } } } \right\}$$
(7)

Equation (7) is of particular interest, since the ratio inside the parentheses is constant across countries. It shows that the net trade of a country for a specific commodity (Tij) is a positive linear function of the country’s forest endowment (Ei) and a negative linear function of the country’s income (Yi).

The HOV model has been used by some scholars in the study of the trade of forest products. Guan et al. (2018) empirically tested the impacts of international efforts to reduce illegal logging using the model, and concluded that the efforts have significantly positive effects on the examined wood products (roundwood, sawnwood, veneer sheet, fibreboard and plywood). Lundmark (2010) analyzed the comparative advantage between EU member states through an extended HOV model. The results of his study suggested that an important determinant for explaining differences in net trade of the included forest commodities is forest endowments and not domestic demand measured by income level. Liu and Tian (2007) have applied the HOV model to analyze the international trade of forest products using the data of 54 countries for the years 1995, 1998, 2001 and 2004. Their study has concluded that the international trade flows of total forest products, logs, other wood, sawnwood, wood-based panel, wood pulp and recycled paper are in line with the trade theory of comparative advantage. Environmental variables were represented by the number of environmental agreements signed by a country, and their effects on the trade flow of forest products were tested. Although the result of their test shows that the environmental variables did not have any significant effect, the conclusion does not rule out the impact of a government’s environmental policy on forest products trade flow. Uusivuori and Tervo (2002) analyzed the effect of forest endowment and economic activity on the net trade of industrial roundwood and forest products, using the data of 18 OECD countries from 1977 to1998. They found limited support for the Heckscher–Ohlin model and concluded that while historical differences in forest industries and resources still exist, the part that forest resources plays in shaping the development of forest industries is becoming less important. However, their study has omitted the energy sector where forest resources are used as fuel, and which is becoming an increasingly important sector.

The impact of the application of FSC CoC certification on the global trade of wood products is the objective of this study. Following the analysis by Guan et al. (2018), the most typical way is to check trade flow within the traditional comparative advantage theory based on the Heckscher–Ohlin–Vanek (HOV) model. In order to do this, an environmental variable related to the application of FSC CoC certification in the model was introduced, and it was studied how it affects trade flow. The model was extended in a number of ways. (1) The selection of wood products is directly affected by CoC certification, therefore wood furniture is also considered besides the products defined by FAO (Food and Agriculture Organization of the United Nations). (2) The samples are expanded to 67 countries including the main forest trade and abundant forest endowment countries, and their trade amount represents about 90% of world imports and exports. (3) The application of FSC CoC certification has started since 1994, however wood processing enterprises have truly applied CoC certification extensively since 2007. Therefore the aggregated effect of 2007–2015 is analyzed. (4) The number of FSC CoC certificates is used to describe the application level, and is included as an explanatory variable. (5) Another explanatory variable included is the per capita income, which influences the market demand for forest products. Since per capita income and people’s environmental attention are strongly correlated, it therefore reflects people’s attention to the environment (Dasgupta et al. 2001).

Based on all these, in the model, the impacts of the application of FSC CoC certification on the global trade of wood products was examined. The dependent variable is the net export value of roundwood, sawnwood, veneer sheet, plywood, particleboard, fibreboard and wood furniture, whereas independent variables include country’s capital stock, three types of labor force according to the education level, forestland area, per capita income, the first order lag of dependent variable, and the number of FSC CoC certificates. The model is expressed as follows:

$${\text{NET}}_{\text{ikt}} = {\text{C}}_{\text{kt}} + \beta_{0} {\text{NET}}_{{{\text{ikt}} - 1}} + \beta_{ 1} {\text{lab}}_{{ 1 {\text{it}}}} + \beta_{ 2} {\text{lab}}_{{ 2 {\text{it}}}} + \beta_{ 3} {\text{lab}}_{{ 3 {\text{it}}}} + \beta_{ 4} {\text{forest}}_{\text{it}} + \beta_{ 5} {\text{ks}}_{\text{it}} + \beta_{ 6} {\text{en}}_{\text{it}} + \beta_{ 7} {\text{gni}}_{\text{it}} + \varepsilon_{\text{ikt}}$$
(8)

where NETikt means the net export value of country i and product k in year t; NETikt−1 is the first order lag of NETikt; Ckt is a constant for product k in year t; ksit is the capital stock of country i in year t; lab1it, lab2it, lab3it refer to the workforce with high, medium, and low quality respectively in year t; forestit represents the forestland area of country i in year t; enit is the number of FSC CoC certificates of country i in year t; gniit is the per capita income in year t; εikt represents the random error term of product K in year t.

In the above model, the estimated coefficient β6 indicates whether the application of FSC CoC certification has had an impact on the growth of the net trade in wood product and the extent to which this impact has arisen. If the value of β6 is greater than 0, it indicates that the application does promote the growth of the net trade in wood products.

4.2 Data

The data for forest products were obtained from International Trade Centre Trade Statistics [International Trade Centre UNCTAD/WTO 1994–2015(http://www.intracen.org)]. The data for the forestland area, per capita income and capital stock were retrieved from the World Bank [World Development Indicators, The World Bank(databank.worldbank.org)]. High quality workforce is the number of the population with high education and technic workers (data are from the World Development Indicators, The World Bank), low quality workforce is the number of illiterate people [data are from the UNESCO Institute of Statistics(uis.unesco.org)], and medium quality workforce is the remaining part of the total economic population. The number of FSC CoC certificates comes from the website of FSC [Forest Stewardship Council(http://www.fsc.org)]. Descriptive statistics of the data are presented in Table 6.

Table 6 Descriptive statistics of the data
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5 Results and discussion

Based on a dynamic data panel, the Hausman test was carried out to check for endogenous variables. The result shows that some variables are endogenous, and therefore the generalized moment method (GMM) was applied to estimate Eq. (8). Compared with the difference GMM, the system GMM is more accurate mainly for its smaller standard deviation, although the coefficient values of the two estimations are very close. The estimation results are shown in Table 7, the Abond and Sargan test was carried out on the results and the conclusion is valid.

Table 7 System GMM estimation results
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The effects on the net export of forest products are different based on different factor endowments. The capital stock affects the net export of all wood products significantly, and its effects are positive for sawnwood, veneer sheet and particleboard, while for other products its effects are negative. It means that a larger capital stock is disadvantageous or advantageous to the net export of different types of wood products. The forestland area also has significant effects on the net export of all these products except for veneer sheet, and its effects are positive for all wood products except veneer sheet, fibreboard and wood furniture. High quality labor affects all wood products significantly except for veneer sheet, its effects on furniture and fibreboard are positive, and are negative for all other products. Medium quality labor affects roundwood and veneer sheet negatively, and its effects are significant for roundwood, while it affects other products significantly and positively. Low quality labor affects roundwood, sawnwood, particleboard, fibreboard and wood furniture significantly; its effects are negative for all products except for fibreboard. This result is not in line with the theory of international trade. One of the reasons may be due to the development of other and more important factors, such as restructuring of the forest industries, technological development and movement towards more value-added products, which are the main drivers for the comparative advantage in the different types of trade in wood products of a country (Uusivuori and Tervo 2002; Guan et al. 2018). The per capita income affects roundwood significantly and positively, while it affects wood furniture, veneer sheet, particleboard and sawnwood significantly and negatively. The negative effect of the per capita income on the net export of veneer sheet, wood furniture, plywood, sawnwood and particleboard is not in line with the theory that demand would increase accordingly to an increase in income. The result seems that the per capita income has structural effects on the forest sector such that richer countries have better developed wood processing industry (Guan et al. 2018). This would be an explanation for the effects of the per capita income obtained from the analysis on the net export of different types of forest products. The first order lag effects of all kinds of forest product are both positive and significant.

The environmental variable has positive effects on the net export of wood furniture, fibreboard, particleboard, plywood and sawnwood, and its effects are significant except for sawnwood, while it has significantly negative effects on the net export of roundwood and veneer sheet. This suggests that the application of FSC CoC certification has brought positive effects on the net trade of sawnwood, plywood, wood furniture, particleboard and fibreboard. The conclusion is consistent with Guan et al. (2018). One possible reason is CoC certification provides an interesting potential business innovation in the value-added wood products sector, and it appears to imply that a company is managing its business well and is showing ethical and environmental responsibility (Gilani et al. 2016). Environmental certification and a corporate focus on exports are two of the more successful initiatives that have been noted with respect to business systems innovations in the forest sector (Wagner and Hansen 2005). This implies certified forest companies are investing in CoC certification as a tool to access new markets where more stringent measures are used to control illegal wood or increase the market share (Chen et al. 2010). Another reason is that countries usually make use of CoC certification to help them comply legally with the legislation in the US or Europe (Lu et al. 2015). These countries have laws like the Lacey Act for the US and the FLEGT for European countries that have the aim to combat illegal logging and promote trade of legal forest products (Wiersum and Elands 2013). As CoC certification is a recognized verification method for identifying the legality of forest products which complies with rules and requirements of the Lacey Act or FLEGT (Li and Chen 2015), exporting countries with CoC certified products gain legal access to these markets (Nguyen and Tran 2011). While the imports of illegal wood into the United States have declined by between 32 and 44% since the Lacey amendments took effect (Environmental Investigation Agency 2015), the FLEGT Action Plan has also achieved its goal of reducing import of illegal logging in Europe since its implementation in 2004 which implies that the certified wood into the United States and Europe has increased (European Commission 2016). However, the result shows that the application of FSC CoC certification has negative effects on the net trade of veneer sheet and roundwood. One possible reason is that countries with good development of FSC CoC certification have a stronger advantage in the production of sawnwood, plywood, wood furniture particleboard and fibreboard, but at the same time, they have obvious disadvantages in the production of roundwood and veneer sheet (Espinoza et al. 2012; Hackett 2013). The application of FSC CoC certification has developed rapidly in 18 countries consisting of China, USA, UK, Germany, Italy, Poland, Japan, Netherlands, Brazil, Spain, France, Canada, Romania, Vietnam, Switzerland, Austria, Belgium and Malaysia, and a great number of the wood products in these countries is certified by the FSC CoC certification. The expansion of the export of these countries means that the amount of certified products is increasing in the world market. The export share of these 18 countries in plywood, particleboard, sawnwood, wood furniture and fibreboard shows an increasing trend in the global market from 2007 to 2016, while the share in veneer sheet and roundwood shows a decreasing trend (Table 8). The results of Table 8 are consistent with the estimation expectation.

Table 8 Export share of the 18 countries in seven types of wood products from 2007 to 2016
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6 Limitation of the study

The present study has confirmed the impact of the application of FSC CoC certification on the trade of wood products. However, despite the fact that this paper has reached its objective, this study still has a number of limitations that should be considered in the future. This study is based on the HOV model for analysis. Although, the model provides an illustrative test of the benefits of making one’s theoretical and empirical models consistent (James 1993) and can offer an adequate explanation for trade patterns, it is based on over-simplified assumptions. However, the real world has a more complex setting and there is a need to examine the effect of FSC CoC certification in a more complex setting such as in tropical countries. This becomes the first limiting factor of this study. The second limiting factor resides in the choice of the data. The present study has only considered FSC CoC certification and its effect on global trade of wood products. Although FSC CoC accounts for a large proportion of the total number of certificates, CoC certification also includes PEFC standards. However, due to lack of data availability, PEFC has not been considered in this study, which gives room for future research.

7 Conclusion

In this paper, the data of 67 countries from 2007 to 2015 were used to examine the impact of the application of FSC CoC certification on global trade of wood products based on the HOV model. The estimated model has shown that the application has had significant and positive impacts on the net export of particleboard, plywood, wood furniture and fibreboard, while it has had significant and negative impacts on the net export of roundwood. These findings imply that more sawnwood, particleboard, plywood, wood furniture and fibreboard in the global market have been FSC CoC certified than roundwood and veneer sheet in meeting the demand for legal products. Although FSC CoC certification has developed quite well, it has been almost stagnant in recent years, and its application in some countries has even decreased. The application of FSC CoC certification is uneven in the world; its main market is centralized in Europe and Asia, while Africa with relatively rich forest resources possesses a small market (Durst and McKenzie 2006; Fischer et al. 2005). It is necessary to encourage more companies to apply FSC CoC certification for roundwood and veneer sheet.