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Property rights, tenure security and forest investment incentives: evidence from China's Collective Forest Tenure Reform

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  • Yi, Yuanyuan
  • Köhlin, Gunnar
  • Xu, Jintao

Abstract

This paper assesses how tenure reform in China's collective forest sector affects Chinese farmer households’ perception of tenure security and propensity to invest in their forestland. A large database consisting of information from 3,180 households in eight provinces from south to north is used to explore factors correlated with more strongly perceived tenure security and determinants of forest-related investment. The study adds to the limited research testing whether there is endogenous causality between investment and tenure security in forestland, and finds that investment was not undertaken to enhance tenure security. In addition, the data allow for differentiation between perceived tenure security and contracted use and transferability rights. Overall, stronger contracted rights were found to affect investment. China's forest tenure reform – where individual households can manage forestland, empowered by legal certification and stronger contract rights – has thus enhanced tenure security and encouraged forest investment.

Suggested Citation

  • Yi, Yuanyuan & Köhlin, Gunnar & Xu, Jintao, 2014. "Property rights, tenure security and forest investment incentives: evidence from China's Collective Forest Tenure Reform," Environment and Development Economics, Cambridge University Press, vol. 19(1), pages 48-73, February.
    • Handle: RePEc:cup:endeec:v:19:y:2014:i:01:p:48-73_00
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    Cited by:

    1. Min Li & Apurbo Sarkar & Yuge Wang & Ahmed Khairul Hasan & Quanxing Meng, 2022. "Evaluating the Impact of Ecological Property Rights to Trigger Farmers’ Investment Behavior—An Example of Confluence Area of Heihe Reservoir, Shaanxi, China," Land, MDPI, vol. 11(3), pages 1-23, February.
    2. Perrings, Charles, 2014. "Environment and development economics 20 years on," Environment and Development Economics, Cambridge University Press, vol. 19(3), pages 333-366, June.
    3. Xiaowo Wu & Jiangwei Tu & Boru Liu & Xi Zhou & Yanxiong Wu, 2022. "Credit Risk Evaluation of Forest Farmers under Internet Crowdfunding Mode: The Case of China’s Collective Forest Regions," Sustainability, MDPI, vol. 14(10), pages 1-17, May.
    4. Yuepeng Zhou & Xiaoping Shi & Dengyan Ji & Xianlei Ma & Satish Chand, 2019. "Property rights integrity, tenure security and forestland rental market participation: Evidence from Jiangxi Province, China," Natural Resources Forum, Blackwell Publishing, vol. 43(2), pages 95-110, May.
    5. Yi, Yuanyuan, 2023. "Devolution of tenure rights in forestland in China: Impact on investment and forest growth," Forest Policy and Economics, Elsevier, vol. 154(C).
    6. Yuge Wang & Apurbo Sarkar & Min Li & Zehui Chen & Ahmed Khairul Hasan & Quanxing Meng & Md. Shakhawat Hossain & Md. Ashfikur Rahman, 2022. "Evaluating the Impact of Forest Tenure Reform on Farmers’ Investment in Public Welfare Forest Areas: A Case Study of Gansu Province, China," Land, MDPI, vol. 11(5), pages 1-17, May.
    7. Yang Yang & Hua Li & Zhen Liu & Long Cheng & Assem Abu Hatab & Jing Lan, 2020. "Effect of Forestland Property Rights and Village Off-Farm Environment on Off-Farm Employment in Southern China," Sustainability, MDPI, vol. 12(7), pages 1-17, March.
    8. Liu, Can & Wang, Sen & Liu, Hao & Zhu, Wenqing, 2019. "Reprint of: Why did the 1980s' reform of collective forestland tenure in southern China fail?," Forest Policy and Economics, Elsevier, vol. 98(C), pages 8-18.
    9. Xu, Jintao & Hyde, William F., 2019. "China's second round of forest reforms: Observations for China and implications globally," Forest Policy and Economics, Elsevier, vol. 98(C), pages 19-29.
    10. Yuepeng Zhou & Xianlei Ma & Dengyan Ji & Nico Heerink & Xiaoping Shi & Hongbin Liu, 2018. "Does Property Rights Integrity Improve Tenure Security? Evidence from China’s Forest Reform," Sustainability, MDPI, vol. 10(6), pages 1-18, June.
    11. Yang Yang & Hua Li & Long Cheng & Youliang Ning, 2021. "Effect of Land Property Rights on Forest Resources in Southern China," Land, MDPI, vol. 10(4), pages 1-15, April.
    12. Liu, Zhaoyang & Gong, Yazhen & Kontoleon, Andreas, 2018. "How do Payments for Environmental Services Affect Land Tenure? Theory and Evidence From China," Ecological Economics, Elsevier, vol. 144(C), pages 195-213.
    13. Xu, Chang & Li, Lingchao & Cheng, Baodong, 2021. "The impact of institutions on forestland transfer rents: The case of Zhejiang province in China," Forest Policy and Economics, Elsevier, vol. 123(C).
    14. Liu, Can & Wang, Sen & Liu, Hao & Zhu, Wenqing, 2017. "Why did the 1980s' reform of collective forestland tenure in southern China fail?," Forest Policy and Economics, Elsevier, vol. 83(C), pages 131-141.
    15. He, Jun & Kebede, Bereket & Martin, Adrian & Gross-Camp, Nicole, 2020. "Privatization or communalization: A multi-level analysis of changes in forest property regimes in China," Ecological Economics, Elsevier, vol. 174(C).
    16. Yang, Xiaojun & Xu, Jintao & Xu, Xiaojie & Yi, Yuanyuan & Hyde, William F., 2020. "Collective forest tenure reform and household energy consumption: A case study in Yunnan Province, China," China Economic Review, Elsevier, vol. 60(C).
    17. Lin, Ying & Qu, Mei & Liu, Can & Yao, Shunbo, 2020. "Land tenure, logging rights, and tree planting: Empirical evidence from smallholders in China," China Economic Review, Elsevier, vol. 60(C).
    18. Yang Ren & Jari Kuuluvainen & Anne Toppinen & Shunbo Yao & Sami Berghäll & Heimo Karppinen & Caixia Xue & Liu Yang, 2018. "The Effect of China’s New Circular Collective Forest Tenure Reform on Household Non-Timber Forest Product Production in Natural Forest Protection Project Regions," Sustainability, MDPI, vol. 10(4), pages 1-17, April.
    19. Jinna Yu & Yiming Wei & Wei Fang & Zhen Liu & Yujie Zhang & Jing Lan, 2021. "New Round of Collective Forest Rights Reform, Forestland Transfer and Household Production Efficiency," Land, MDPI, vol. 10(9), pages 1-22, September.
    20. Dong, Jiayun & Liang, Wenyuan & Liu, Weiping & Liu, Jinlong & Managi, Shunsuke, 2020. "Does forestland possession enhance households’ access to credit?—Examining China’s forestland mortgage policy," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 78-87.
    21. Liu, Shilei & Xu, Jintao, 2019. "Livelihood mushroomed: Examining household level impacts of non-timber forest products (NTFPs) under new management regime in China's state forests," Forest Policy and Economics, Elsevier, vol. 98(C), pages 44-53.
    22. Tingting Zhang & Shunbo Yao & Jinna Yu & Assem Abu Hatab & Zhen Liu, 2020. "Effects of China’s Collective Forestland Tenure Reform Policies on Forest Product Firm Values," Land, MDPI, vol. 9(4), pages 1-20, April.
    23. Yiwen, Zhang & Kant, Shashi & Dong, Jiayun & Liu, Jinlong, 2020. "How communities restructured forest tenure throughout the top-down devolution reform: Using the case of Fujian, China," Forest Policy and Economics, Elsevier, vol. 119(C).
    24. Dong, Jiayun & Liang, Wenyuan & Fu, Yimin & Liu, Weiping & Managi, Shunsuke, 2021. "Impact of devolved forest tenure reform on formal credit access for households: Evidence from Fujian, China," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 486-498.

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