Secondary transportation of raw and comminuted forest products is a major component in forest harvesting operations in terms of economics, public perception, and safety. Consequently, there is a substantial amount of literature on this topic. The existing literature has dealt with many of the technical aspects of transportation with a majority of them focusing on improving supply chain issues; however, there are only few specific to secondary transportation issues in general. This annotated bibliography will help practitioners, researchers, and stakeholders gain a better understanding of the existing literature from 2000 to 2015. To this end, we began by classifying the selected literature into six themes: cost, roads and routes, trucking, efficiency and safety, other modes of transportation, and supply chain and optimization. Woody biomass for bioenergy production was the most researched forest product with respect to transportation. About one-third of the articles were presented in the context of supply chain modeling and optimization. More than half of the studies originated from Europe while the United States had the most publications for any given country. Most articles (16) were published in 2013. Biomass and Bioenergy published the highest number of articles (29) during the timeframe.
Timber real estate investment trusts (REITs) are companies that own and manage timberland and generate revenue by harvesting and selling timber or other forest-related products. Due to their popularity with investors, timber REITs in the United States attracted growing research interest in the recent decades. This necessitates a review of existing knowledge on timber REITs’ evolution and their financial performance over the years. In this review, we summarized the history and development of timber REITs, discussed tax policies applicable to timber REIT growth and their implications. We also reviewed past studies focusing on the financial performance of timber REITs and synthesized methodologies used in those studies. At the end, we posited the possibility of consolidation waves in the timber industry and identified some opportunities for future research. This review can shed some new light on the evolution of public timber REITs and their financial performance.
Changes in tax codes applicable to timberland investments can affect tax treatment of timber revenues and expenses. The 2017 Tax Cuts and Jobs Act (TCJA) is regarded as the most expansive overhaul of tax codes in the United States since 1986; however, our understanding of its effects on timberland investments for family forest owners has yet to be explored. Using the discounted cash-flow method, we estimated and compared effects of TCJA on land expectation value (LEV) and net tax from managing timberland for two classifications of median-income family forest owners in 10 southern states. Results showed a decrease in LEV and net tax for both material participants and investors, with a greater effect on landowners managing timberland as investments. Thus, owning timberland can become less beneficial under the current law for median-income family forest landowners. Study Implications: Family forests occupy a large portion of the total forest area in the United States and provide various goods and services to society. Taxes and tax policies are regarded as important issues for these landowners because policies could ultimately influence timberland investment, ownership structure, and management activities. After the 2017 tax reform, landowners became concerned about the effect of the new act on profitability and financial return from timberland investment. Here, we attempt to provide a better understanding of tax effects by estimating change in net benefit of owning and managing timberland under the current law compared with the previous law in 10 southern states. For policymakers, this study can provide insight into the importance of considering unique characteristics of timberland investment during the tax policy design and evaluation process. For landowners, this study can facilitate the timberland investment decisionmaking process and serve as a guide to the effects of the new tax rules on returns.
We examined the relationship between public timber real estate investment trusts (REIT), private timberland, real estate, and financial asset returns using a multi-factor model and investigated the time-varying volatility of timber REITs under the state space framework. We first orthogonalized explanatory variables to obtain pure factors. Then we decomposed REIT volatility into S&P500, private-equity timberland, real estate, bond, and idiosyncratic risk components. Results reveal that timber REITs are positively sensitive to large-cap stocks and bonds. Volatility contributions of the large-cap stock factor are consistent and high whereas those of idiosyncratic risk factors decline over time. Private-equity timberland, real estate, and bonds exhibit negligible contribution to the volatility of timber REITs. We conclude that timber REIT characteristics change with time and the timber REIT market is not mature. Thus, the results contribute to our understanding of the risk and return features of public-equity timberland investments. Study Implications: Forest management activities and investment rationales of timber REITs often differ from those of other forestry companies, which may affect the asset allocation decision of timber REITs as an asset class in a broad portfolio. Therefore, understanding the return dynamics and the time-varying risk decomposition of timber REITs is critical. We find that both return and risk of timber REITs are sensitive to large-cap stocks. Our analysis has implications on decision-making and risk management of public-equity timberland investments. Overall, this study improves our understanding of the financial characteristics and market maturity of timber REITs in the United States.
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