Does Foreign Direct Investment Enhance Exports of China’s Wood Products? The Role of Wood Resource Efficiency

China is one of the world’s leading producers and exporters of wood-based panels and plays a crucial role in ensuring a stable global supply of wood products. But China’s wood product exports have recently diminished, potentially due to the retraction of foreign investment. This behavior remains unexamined mechanistically in the current literature. This study investigates the impact of FDI on the export performance of China’s wood processing industry and explores the potential for leveraging foreign investment to reverse the downward trend in export growth. Our findings indicate that FDI alleviates export constraints by enhancing wood resource efficiency, which suggests a substantive response to industry challenges rather than a mere strategic adjustment. However, FDI inflows have decreased in recent years, negatively affecting export performance and highlighting the need for policy improvements. We further examine the differential effects of FDI on exports across port and non-port regions, given that the urgency of attracting FDI varies spatially. Our analysis reveals that the export spillover effect of FDI in port areas is approximately 165% higher than in non-port areas, largely due to China’s high dependence on wood product imports. In regions with extensive artificial forests, the impact is lower, possibly due to a stronger focus on domestic markets. In particular, Eastern China, benefiting from early market liberalization and a history of successful foreign collaborations, demonstrates significant improvements in export performance. To mitigate the export pressures on China’s wood processing industry, we recommend targeted industrial policies, particularly for port areas, to attract high-quality FDI that supports global supply chain stability and sustainable development.