The inevitable role of the oil market: Does its price really matter for forestry investment in China?

Abstract

Delving into the intricate roles of oil prices holds the key to attaining sustainable growth of forestry investment in China. Utilising the full- and sub-sample approaches, this article aims to reveal the dynamically evolving relationships between oil price (OP) and forest investment (FI) in China. The quantitative outcomes underscore the complex interplay between OP and FI, highlighting favourable and unfavourable impacts. Notably, the findings indicate that a substantial surge in oil prices could potentially pose obstacles to forestry investment in China, whereas a decline in OP could serve as a stimulus. Nevertheless, it is imperative to acknowledge that this inference is not uniformly applicable when the effect turns positive, primarily influenced by sluggish economic conditions resulting from the global trade wars. Conversely, FI positively influences OP, underscoring that the decline in forestry investment in China could drive down oil prices through psychological and environmental factors. Amid escalating economic and energy uncertainties globally, essential policy suggestions will be proffered to China, aiming to ensure the robust development of the oil market and forestry investment.