The ternary margins of China's forest products export and their determinants

This study first measures the extensive, quantity, and price margins of China's forest products export to 32 destinations based on a well-accepted method and data from 2000 to 2016. Then, it estimates the effects of relevant factors on these margins. It is found that before the 2008 financial crisis, each of the three margins played a major role in promoting the export growth; afterwards, the extensive and price margins became stabilized, making the quantity margin the only contributor to continued growth. While a leveling off of the extensive margin suggests a relative maturity of the industry in the international markets, the diminution of the price margin reflects the intensified international competition and the exhaustion of China's price advantage, as shown in the availability of cheap labor. Moreover, market size of destination country, fixed trade cost, variable trade cost, labor productivity, and free trade agreement had significant impacts, as expected, on the ternary margins. Finally, multiple steps are proposed to maintain and enhance the export growth.