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Effects of China’s Collective Forestland Tenure Reform Policies on Forest Product Firm Values

Tingting Zhang (), Shunbo Yao (), Jinna Yu (), Assem Abu Hatab () and Zhen Liu ()
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Tingting Zhang: School of Economics and Management, University of Science & Technology Beijing, Beijing 100083, China
Shunbo Yao: College of Economics and Management, Northwest A&F University, Yangling 712100, China
Jinna Yu: Business School, Guizhou Minzu University, Guiyang 550025, China
Zhen Liu: School of Business, Nanjing Normal University, Nanjing 210023, China

Land, 2020, vol. 9, issue 4, 1-20

Abstract: China’s collective forestland tenure reform has dramatically affected the business environment of domestic forest product firms. This study examines the impact of the said reform on the expected values of these firms, via the reaction of investors (as seen on the stock markets) towards the issuance of related policies. Based on signaling theory and the assumption that the Chinese stock markets are efficient in terms of work form, this study adopts an event study method and examines five policies during the 2003–2009 period. The numbers of forest product firms used in the examinations herein differ among the policies and range from 21 to 29. This study found that the policies have differentially affected the expected values of forest product firms and that the impact on firms lacking forestland holdings is generally more significant than that on firms that hold forestland. The findings of this study enhance our understanding of the effect of collective forestland tenure reform on the value of forest product firms; they also have implications on forest product firms as they work to adapt to the reform.

Keywords: forestland tenure reform; forestland ownership; event study; abnormal return; forest product firm (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2020
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