Comparative advantage and forest endowment in forest products trade: evidence from panel data of OECD-countries
This paper provides panel data evidence on the question of how forest endowment and economic activity affect net exports of industrial roundwood and forest products. 18 OECD countries are studied with data covering the years 1977-1998. Our results derived from the cross-sectional variation of the variables give limited support to earlier findings that have supported the so-called Heckscher-Ohlin (H-O) theorem. We identify two groups of countries: one group where net exports index of forest products have mostly had an increasing trend over the studied period, and another one where this trend has been decreasing or stagnant. In the latter group of countries the H-O theorem is confirmed while the data drawn from the first group fail to confirm the theorem. Analysis based on the longitudinal variation of the data showed that there has not been any long-run impact of changes in either the forest endowment or economic activity on the level of net exports of forest products. On the other hand net exports do have an impact on timber production. While historical differences in forest industries and resources still exist between developed countries the role of forest resources is becoming less important in shaping the development of forest industries in these countries.
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