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Scientia Silvae Sinicae ›› 2015, Vol. 51 ›› Issue (9): 126-133.doi: 10.11707/j.1001-7488.20150916

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Interaction Relationship between Central Forestry Investment and Forestry Economic Growth in China

Cai Qi1, Chen Shaozhi2, Zhao Rong2   

  1. 1. School of Economics and Management, Beijing Forestry University Beijing 100083;
    2. Research Institute of Policy and Information Sciences, CAF Beijing 100091
  • Received:2015-06-01 Revised:2015-08-19 Online:2015-09-25 Published:2015-10-16

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Abstract:

[Objective] Study on the interaction relationship between central forestry investment and forestry economic growth and the establishment of the central forestry investment evaluation system are good for clearing the status of central forestry investment in forestry economic growth. This will provide empirical basis for measuring the efficient of central forestry investment, promote optimal allocation of financial resources, increase the fund performance, and also will drive the forestry economic growth.[Method] The software of Stata13.0 and data from 1987 to 2013 were used in this study. First, the C-D production function was used to analysis the contribution rate about central forestry investment and forestry labor input to forestry economic growth. Then VAR model was utilized to calculate lag phase of forestry investment, co-integration relationship test showed that forestry economic growth had the reaction to forestry investment during the long-term equilibrium and granger causality test to determine the short-term causality between forestry investment and forestry economic growth. Furthermore, error correction model respectively to argue when the central forestry investment and forestry economic growth deviated from its equilibrium level, the possibility to restore the long-term balance in the short time. Finally, impulse response function could more intuitively to response the impact on each other and itself in long term.[Result] The results shows that: 1) Central forestry investment has a positive role in promoting economic growth with contribution rate of 1.517%. 2) The lag of central forestry investment is 1 to 2 years and then began to work. Forestry production has a significant pull impact on forestry investment growth which presents 1% of forestry economic growth leading to 0.991% of forestry investment. Forestry economic growth does not rapidly promote the forestry investment growth, however, the central forestry investment can improve the forestry economic growth in the short term. 3) Central forestry investment and forestry output have a long-term equilibrium relationship and central forestry investment recovers more quickly than forestry production in the short term when both of them deviate from equilibrium level. Forestry production has a cumulative effect and forestry investment has an accumulation and promotion effects on itself. Moreover, forestry production has an income-effect on the forestry investment and the forestry investment generates a multiplier effect to forestry production. [Conclusion] Because of the forestry investment and forestry economic growth existing the action and reaction, the policy recommendations are proposed as following: to increase central forestry investment and keep a reasonable investment, to make a long-term policy planning in order to prevent the inter-annual large swings and temporary policy changes, and to improve central forestry investment system and promote the diversification of investment.

Key words: central forestry investment, forestry production, C-D production function, VAR model

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