Journal of Forest Economics > Vol 12 > Issue 1

Estimating substitution in coniferous sawnwood imports into Germany

Antti Mutanen, , antti.mutanen@metla.fi
 
Suggested Citation
Antti Mutanen (2006), "Estimating substitution in coniferous sawnwood imports into Germany", Journal of Forest Economics: Vol. 12: No. 1, pp 31-50. http://dx.doi.org/10.1016/j.jfe.2005.10.005

Published: 14 Mar 2006
© 0 2006 Antti Mutanen
 
Subjects
 
Keywords
JEL Codes:D400L100
Law of one priceSawnwood market analysisSubstitution elasticitiesTranslog sub-cost function
 

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In this article:
Introduction
Market overview
Theoretical framework
Data
Results
Discussion

Abstract

Germany is one of the largest importers of coniferous sawnwood in Europe. Traditionally Sweden, Finland and Russia have dominated the German sawnwood import market. However, the market structure has changed recently as the Swedish and Finnish sawnwood producers have lost a part of their market share while the Russian producers have strengthened their position. In order to explain the ongoing change in market shares, the integration of the German sawnwood import market and the substitution in the demand for sawnwood imports from different countries were investigated using econometrics. The quarterly data set covered the years 1991–2003. The results indicate that the German sawnwood import market is well integrated. Furthermore, the prices of Swedish and Russian sawnwood have followed the price of Finnish sawnwood. However, according to the estimated cross-price elasticities, it is apparent that the Russian sawnwood has not substituted for either the Finnish or the Swedish sawnwood in the sawnwood import into Germany.

DOI:10.1016/j.jfe.2005.10.005