Measuring improvement of economic condition in state-owned forest farms' in China

Abstract

An important policy cornerstone for China to reduce poverty includes China's goal of achieving complete poverty alleviation in its state-owned forest farms by 2020. This study describes and documents the poverty reduction effect in impoverished Chinese state-owned forest farms. Based on a sample of 4855 state-owned forest farms in 31 provinces in China from 2008 to 2017, this paper uses the difference-in-difference method to study the dynamic process of poverty reduction by policies for impoverished state-owned forest farms. The results show that the implementation of the policy significantly promoted the economic development of impoverished state-owned forest farms and caused the treatment group to increase by approximately 10.6% over the control group. Moreover, the establishment of a list of impoverished state-owned forest farms had an indirect impact on the economic performance of forest farms, through channels such as infrastructure poverty alleviation, human capital investment, and per capita income of forest farm employees. Additionally, the effects of the policy on non-impoverished counties were stronger than that on impoverished counties, and impoverished state-owned forest farms may not appear in impoverished counties. The degree of financial dependence of the local government had a significant positive impact on the economic development of impoverished state-owned forest farms. The effects of the policy on different forest farms were heterogeneous. Our study provides recommendations for the future development of impoverished Chinese state-owned forest farms and for the improvement of poverty alleviation efficiency.