The Impact of Imported Timber Price Fluctuations on the Margins of Wood Forest Product Exports: Empirical Evidence from Provincial-Level Data in China

Abstract

This paper adopts a comprehensive approach to integrating the wood forest product trade of China's provinces with the global market, utilizing over four million records of trade data from the Chinese Customs database and the United Nations Trade and Commerce database, creating a three-dimensional panel dataset structured by year—province—importing country. The paper decomposes the export trade share into extensive margin, quantity margin, and price margin, collectively referred to as the ternary margins of export, to analyze the impact of imported timber price fluctuations on these export margins of wood forest products. The findings indicate that fluctuations in imported timber prices increase uncertainty, thereby suppressing the growth of China's wood forest product export share, extensive margin, and quantity margin while increasing the price margin. Heterogeneity tests further reveal that the impact of imported timber price fluctuations is more pronounced for southern forest regions, labor-intensive wood products, and countries without a free trade agreement. Mechanism tests suggest that increasing forestry fixed asset investment intensity and enhancing timber supply capacity can help mitigate the uncertainty effects associated with imported timber price fluctuations. The paper proposes policy implications, including enhancing local timber supply resilience, strengthening government support for forestry, and reinforcing the supply chain.