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Scientia Silvae Sinicae ›› 2021, Vol. 57 ›› Issue (7): 184-193.doi: 10.11707/j.1001-7488.20210720

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The Structure of Commercial Forests "Tending to Become Economic Forests": An Analysis of Causes Based on Labor Cost Effects and Relative-Revenue Effects

Yu Cheng1,Can Liu2,Hongqiang Yang3,Han Zhang1,*   

  1. 1. College of Economics and Management, Northwest A&F University Yangling 712100
    2. Economic Development Research Centre, National Forestry and Grassland Administration Beijing 100714
    3. College of Economics and Management, Nanjing Forestry University Nanjing 210037
  • Received:2020-08-13 Online:2021-07-25 Published:2021-09-02
  • Contact: Han Zhang

Abstract:

Objective: With the rising labor cost in rural China, the structure of commercial forests displays a phenomenon of "tending to become economic forests". This is contrary to the feature of "tending to become grains" in agricultural sector. This study aims to explain the unexpected phenomenon from the perspectives of labor cost and relative revenue, in order to understand the underlying mechanisms of farmers' decision-making on forest structure adjustment, and to predict the trend of structure adjustment of commercial forests. Method: From the perspectives of labor cost and relative revenue, this study establishes a logical framework for the adjustment of structure of farmer's commercial forests. Based on this, several hypotheses are proposed, and the empirical analysis is performed based on a household survey dataset from National Forestry and Grassland Administration, which covers 9 provinces in China. Considering the censoring of data and the endogeneity of variables, this study adopts the Ⅳ-Tobit to estimate parameters. Result: The ratio of economic forests has increased from 11% in 2003 to 19% in 2013, and shows a significant rise before and after the collective forestland tenure reform. It displays an evident trend of "tending to become economic forests". The statistical descriptions show that the revenue per hm2 of economic forests is around 2.15 times of that of timber forests. The estimation with Ⅳ-Tobit model shows that there is a positive and negative effect of labor cost and relative revenue on the structure of commercial forests. The effect of labor cost is significant at the 5% level, and the effect of relative revenue is significant at the 1% level. This reflects that the structure of commercial forests is affected by both labor cost and relative revenue, and the adjustment direction depends on the intensities of the two effects. In addition, the interaction coefficient between collective forestland tenure reform and relative revenue is positive and significant at the 1% level. It shows that the positive effect of relative revenue on economic forests is strengthened after the collective forestland tenure reform, i.e., the positive effect is moderated by the tenure reform. A further calculation shows that, the contribution rate of labor cost is about-26%, while the rates of relative revenue and the interaction are about 41% and 28% respectively. It implies that the positive effect of relative revenue is dominant, which leads to the increase of the proportion of economic forest area. Furthermore, the regression with previous four years verify the hypotheses from an opposite perspective. The robust tests show that the above results are basically robust. Conclusion: Rising labor cost lead to a decline of the proportion of economic forest area; but the moderating effect of collective forestland tenure reform has strengthened the positive effect of relative revenue on the proportion of economic forest area. This leads to the "tending to become economic forest" of the structure of commercial forests. The inter-sector difference on property rights reform is an important reason for the opposite adjustment trend of the agricultural and forest structure. These findings are helpful for the prediction of the future trend of commercial forest structure and have insightful policy implications on the optimizing of commercial forest structure.

Key words: commercial forest structure, labor cost, relative-revenue, collective forestland tenure reform, moderating effects

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