Property rights, credit access, and farmers’ NTFP investment: evidence from collective forest areas of Liaoning, China

Property rights strength refers to the intensity with which property rights are exercised and enforced in practice, reflecting the effectiveness of China’s collective forestry rights reform. Based on the framework of property rights economics and credit rationing theory, and using survey data from 460 households across five counties in Liaoning Province, various econometric models were used to estimate how property rights strength drives farmers’ NTFP investment. The findings reveal that property rights strength has a positive effect on NTFP investment and input allocation. Specifically, social recognition and behavioral capacity exert stronger incentives than legal empowerment. Meanwhile, forest rights mortgage credit accessibility mediates the relationship between property rights strength and farmers’ NTFP investment. The paper concludes with recommendations for policymakers that tenure reforms should not only ensure legal empowerment through formal land certification but also strengthen social recognition and farmers’ behavioral capacity, alongside improving credit access to support NTFP investment in developing countries.