Current issue: 54(5)
Under compilation: 55(1)
The purpose was to analyse the importance of forestry and forest industry in the Finnish economic development since the 1950’s, and to find out how the sector has contributed to the growth of the national economy through other sectors. Data were derived from the input-output tables of 1959, 1970 and 1980. Information provided by Hirschmanian linkages was expanded by taking into account e.g. induced, consumption, final demand and absorption linkages. The linkages of forestry and forest industry had multiplied during the study period. Both final demand linkages and intermediate product linkages were significant. The sector’s contribution to the development of metal and machinery and equipment industries as well as that of energy/water supply was significant. Integration with most other sectors has increased. Indirect production coefficients of forestry and forest industry were larger than on average in manufacturing. Because of labour productivity growth, production and employment coefficients were different.
The PDF includes an abstract in Finnish.
The area of world forests is gradually declining because of various human activities, such as shifting cultivation, uncontrolled logging and industrial pollution. Continuation of the trends would have detrimental ecological, economic and social effects on global scale. The diversity of the problem is wide. The situation in the tropical developing countries differs from that in the industrialized world. With the present rates of population growth and unchanged forest policies, the fuelwood shortage in developing countries is rapidly aggravating. The need for more agricultural land tends to prejudice conscious efforts to increase wood production.
The industrialized countries are experiencing problems in introducing forest policy means to maintain sufficient timber supply. Rapidly increasing pollution problem cause a serious hazard to the existence of the whole forest ecosystem. Forestry has primarily been a national issue of relatively low priority in political decision-making, which has resulted in insufficient action to remedy the situation at national and international level.
The renewability of forest resources represents a strategic asset, the importance of which is bound to increase in the long-run potential for badly needed economic and social change in the world’s poor rural areas will be lost.
The PDF includes a summary in Finnish.
Improvement of Finnish forest industries’ competitiveness in the world markets through productivity increase as branch and plant level requires the search for appropriate comprehensive productivity indicators and the analysis of factors underlying productivity variations. These were the main objectives of the study. The data was based on the information on individual plants in 1974, obtained from the files of Industrial Statistics in the Central Statistical Office in Finland.
The study uses neoclassical average production functions as the starting point and the theory is expanded to cover factors underlying productivity variation when measured with regard to labour, capital, material input, and total factor input. For the measurement of the latter an index formula is suggested which would not necessarily incorporate neoclassical assumptions as they cannot be assumed valid in the Finnish forest industries. The estimation results of average production functions suggest increasing rate of returns in sawmilling but in pulp and paper production evidence remains inconclusive. The elasticity of substitution is unlikely to be constant and the non-homotheticity assumption cannot be rejected.
The productivity variation is, in general, best explained by a relatively simple model with capital-labour ratio, plant size and output quality as explanatory factors. Further trials with input quality, input price ratio, process characteristics, and the rate of capacity utilization improved the models only marginally in most cases, which may have been partly due to the failure to measure the variables successfully.
The cross-section results are compared with those of an earlier time-series study. The estimation results of average production functions yield somewhat different information in the long and short run. Both cross-section and time-series productivity models illustrate the importance of output level in total productivity.
The PDF includes a summary in Finnish.