Competition of wood products with different fiber transformation and import sources

Published Date
January 2017, Vol.74:30–39, doi:10.1016/j.forpol.2016.11.00

Author 

• Changyou Sun 

• Department of Forestry, Mississippi State University, Mississippi State, MS 39762, USA

Received 29 September 2015. Revised 7 October 2016. Accepted 2 November 2016. Available online 11 November 2016. 

Highlights

• Japan and China have been the leading importers of wood products.
• •
  Imports are evaluated with the translog cost function and cointegration analysis.
• •
  Substitutability across product types and supplying sources is identified.
• •
  Log export tax by Russia have generated trade diversion effects.

Abstract

Japan and China have been two leading importers of wood products in the global market, and the trade pattern for China since 1993 has largely repeated that for Japan in the 1960s. In this study, the import demand of wood products in Japan and China between 1995 and 2013 by product type and source is assessed using the translog cost function and cointegration analysis. Wood products are classified into three main types by the degree of processing and transformation on wood fiber: roundwood, sawnwood, and wood-based panels. The own-price elasticities are overall inelastic, but they can become very elastic for some source-differentiated products (e.g., sawnwood import by Japan and roundwood import by China from the United States). Clear substitutability across product types and supplying sources is identified. Wood products with a different degree of processing or from different sources can be substituted with each other when they are used by wood-utilizing industries in the importing countries. The substitute relation will continue to present both opportunities for economic development and challenges for global environment protection.

Keywords

Cointegration analysis

Demand elasticity

Import demand

Translog cost function

Error correction model

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