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Foreign Direct Investment, Exports and Exchange Rates: The Case of Forest Industries

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Abstract:

Foreign direct investment (FDI) by forest companies has increased rapidly in the 1990s. An interesting question is to what extent FDI and traditional trade in the forest sector are substitutes or complements to each other. For example, does FDI lead to increased or decreased exports of forest products from the home country in the long run? This article explores the dynamic relationship between FDI and exports of forest industries with U.S., Finnish, and Swedish data. Both short-term and long-term interrelationships between FDI and exports are studied, as well as the short-term and long-term effects of exchange rate movements and exchange rate variation. The results show that for the U.S. forest industries, FDI and exports of forest products may have become full substitutes in the 1990s. In the case of the Finnish and Swedish forest industries, exports seem to affect negatively the investments abroad, while FDI does not affect exports in the long run. Both the FDI and exports by the U.S. forest industries are unaffected by dollar variability. In the 1980s, the strengthening value of the dollar increased the FDI by the U.S. forest industries. FOR. SCI. 47(4):577–586.

Keywords: Corporate strategies; environmental management; forest; forest management; forest resources; forestry; forestry research; forestry science; globalization; international trade; natural resource management; natural resources

Document Type: Miscellaneous

Affiliations: 1: Department of Forest Economics, University of Helsinki, P.O. Box 27 Finland, FIN-00014, Phone: +358-9-19157976; Fax: +358-9-19157984 jussi.uusivuori@helsinki.fi 2: University of California, Forest Products Laboratory, 1301 South 46th Street, Richmond, CA, 94804-4698, Phone: (510) 215-4222 susanna.laaksonen-craig@ucop.edu

Publication date: 2001-11-01

More about this publication?
  • Forest Science is a peer-reviewed journal publishing fundamental and applied research that explores all aspects of natural and social sciences as they apply to the function and management of the forested ecosystems of the world. Topics include silviculture, forest management, biometrics, economics, entomology & pathology, fire & fuels management, forest ecology, genetics & tree improvement, geospatial technologies, harvesting & utilization, landscape ecology, operations research, forest policy, physiology, recreation, social sciences, soils & hydrology, and wildlife management.
    Forest Science is published bimonthly in February, April, June, August, October, and December.

    2016 Impact Factor: 1.782 (Rank 17/64 in forestry)

    Average time from submission to first decision: 62.5 days*
    June 1, 2016 to Feb. 28, 2017

    Also published by SAF:
    Journal of Forestry
    Other SAF Publications
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