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Industrial Timberland Ownership and Financial Performance of US Forest Products Companies

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This study presents an empirical analysis of the relationship between industrial timberland ownership and financial performance of forest products companies in the United States. Based on the structure-conduct-performance model of the industrial organization theory, we develop and estimate a three-stage least squares model system that links timberland ownership with performance. Our results show that holding timberland improves a forest products company's profitability and lowers its systematic risk. Still, these benefits cannot overcome the costs induced by institutional arrangements, leading most forest products companies to divest their timberlands.

Keywords: accounting rules; financial performance; industrial organization theory; industrial timberland ownership; institutional timberland ownership; structure-conduct-performance; timber tax

Document Type: Research Article


Publication date: 2014-06-01

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.

    2015 Impact Factor: 1.702
    Ranking: 16 of 66 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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