Fisheries scientists has been calling for a more sweeping reform for the removal of harmful subsidies across each country's domestic waters to promote fisheries sustainability. This study presents the first-of-kind empirical evidence that fisheries subsidy reform can positively impact the capacity contro and gear structure of fishing fleets. By analyzing detailed vessel registry data, I assess the effects of a nationwide fisheries subsidy reform on the dynamics of a large offshore fisheries fleet in China. Quantifying the treatment effect heterogeneity within the fleet in response to the reform, I construct an entry-exit model of fishing power and simulate the counterfactual fleet structure in the absence of fuel subsidy reforms. The key findings indicate that the 2016 fuel subsidy reform not only accelerated overall capacity reduction but also incentivized the substitution of high-intensity fishing gears (such as trawlers) with less intensive and more selective gear types (such as gill nets, longlines, and crab pots). These results underscore the critical role of considering fleet structure in designing effective fisheries reforms, particularly for mixed fisheries in developing countries.

fishery resources management,Subsidy Policy