Short- and Long-run Effects of Socio-economic Factors on Forest Dynamics in China

Abstract

As the world's forest area continues to decline, China's forest area has consistently increased since the 1980s. In this research, we clarified the driving force behind this by focusing on the socio-economic factors of China. There is much previous research on the relationship between socio-economic factors and forest resources in various countries. However, the methods used for research in this field are mainly panel data analysis, and the results produced using such tests, for example unit roots and cointegrations of time series data, are limited. In this research, we used the time series data for the last 40 years on forest area and socio-economic factors in China, and we used an autoregressive distribution lag (ARDL) model considering the stationarity of variables and the cointegration relationship. Unit root tests show that all variables are either stationary or becoming stationary after the first differencing. The estimation results show that the change rate of GDP per capita has a positive impact on the change rate of forest area in the short-run but a negative impact in the long-run, and that the change rate of rural populations has a negative impact in both the short- and long-run. It was also shown that the change rate of urban population and foreign direct investments in China have a positive impact on forest coverage rates in the short-run.