Timber Management Decision Making under Imperfect Capital Markets

Paul A. Murphy, James C. Fortson and James E. Bethune

American Journal of Agricultural Economics, 1977, vol. 59, issue 2, 302-310

Abstract: Capital market imperfections seldom have been considered in the choice of financial criteria for making timber management decisions. A forest planning model for evenaged timber management is developed to evaluate criterion selection under imperfect markets. Some investment rules are shown to be equivalent to maximizing the firm's liquidation value for certain capital market conditions. Although imperfect capital markets severely limit wealth accumulation, small deviations from the optimal harvesting schedules do not severely affect the firm's value. Much concern about criterion selection would evaporate if the firm's investing and financing functions were integrated into a single process.

Date: 1977
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:59:y:1977:i:2:p:302-310.

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