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Determinants of China's lumber import: A bounds test for cointegration with monthly data

Author

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  • Zhang, Han
  • Zhao, Qing
  • Kuuluvainen, Jari
  • Wang, Changhai
  • Li, Shiping

Abstract

This paper estimates the long- and short-run demand equations for imported lumber based on classical production theory. Chinese monthly data from January 2000 to December 2013 are used. To account for the mixed integrated orders of variables and to control for the potential endogeneity, the bounds testing approach for cointegration is employed within an autoregressive distributed lag framework. The results show that there exists a long-run cointegrating relationship between China's lumber import and some specific explanatory variables. In the long run, the import demand is found to be elastic with respect to the lumber import price and a macroeconomic shifter at the 5% statistical level. Imported lumber seems to be a complement to other input factors, but the effect is not statistically significant. As expected, the short-run price and income elasticities are smaller in absolute terms than their long-run counterparts. The projection indicates China's future lumber imports will probably keep growing, but with a slower annual growth rate than observed in the past.

Suggested Citation

  • Zhang, Han & Zhao, Qing & Kuuluvainen, Jari & Wang, Changhai & Li, Shiping, 2015. "Determinants of China's lumber import: A bounds test for cointegration with monthly data," Journal of Forest Economics, Elsevier, vol. 21(4), pages 269-282.
    • Handle: RePEc:eee:foreco:v:21:y:2015:i:4:p:269-282
    DOI: 10.1016/j.jfe.2015.10.002
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    Cited by:

    1. Borzykowski, Nicolas, 2019. "A supply-demand modeling of the Swiss roundwood market: Actors responsiveness and CO2 implications," Forest Policy and Economics, Elsevier, vol. 102(C), pages 100-113.
    2. Baixu Zhou & Xinyue Qi & Xinru Hou & Zhili Chen & Jinzhuo Wu, 2023. "Identification and Spatial Correlation of Imported Timber Landing Processing Industrial Clusters in Heilongjiang Province of China," Sustainability, MDPI, vol. 15(6), pages 1-15, March.
    3. Clements, Sherwood & Tidwell, Alan & Jin, Changha, 2017. "Futures markets and real estate public equity: Connectivity of lumber futures and Timber REITs," Journal of Forest Economics, Elsevier, vol. 28(C), pages 70-79.
    4. Korhonen, Jaana & Henderson, Jesse D. & Prestemon, Jeffrey, 2023. "National forest timber bids and export price interlinkages in the USA: The bounds testing approach," Forest Policy and Economics, Elsevier, vol. 152(C).

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    More about this item

    Keywords

    C32; F14; Q21; Q23; Lumber import demand; China; Bounds test; Cointegration; Long- and short-run elasticities;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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