The round wood market in Greece: An empirical approach

E. Zafeiriou, G. Arabatzis, Th. Koutroumanidis

Abstract


The present study aims to determine the factors affecting the producer price of the industrial round wood. The factors examined as determinants of the producer price are the volume of domestic production, imports and exports of the industrial round wood in Greece. As a proxy for the producer price, the round wood of long length (> 2m) price is employed. For the achievement of the aforementioned objective, Johansen cointegration technique was implemented. The results confirmed the existence of a sole long-run relationship between the variables studied while the estimation of the vector error correction model indicated a statistically significant speed in the long-term equilibrium. The implementation of the Granger causality test has shown that the producer’s price is affected by the imported volume while the domestic production is determined by the volume of exports. Finally, the producer prices are determined by the exports and the imports of the Greek wood sector and vice versa. All the aforementioned results are consistent with the classic supply-demand economic theory.


Full Text:

PDF

References


Anagnos, N., Stamou, N., 1981. The dynamic analysis of the wood prices using time lags. II. Contribution to the market research of pine sawlogs of first quality. Scientific Annals of the School of Agriculture and Forestry, Section Forestry, Aristotelian University of Thessaloniki. Dedicated to Dr. Chr. Moulopoulos, Emeritus Professor. Vol KD-Annex, No 10,305-328. Thessaloniki. (in Greek).

Aulisi, A., A. Sauer And F. Wellington. 2008. Trees in the Greenhouse — Why climate change is transforming the forest products business. World resources institute. Washington, DC. Online at: http://pdf.wri.org/trees_in_the_greenhouse.pdf

Buongiorno, J., Uusivuori, J., 1992. The law of one price in the trade of forest products: co-integration tests for US exports of pulp and paper. Forest Science 38, 539-553.

Dickey, D., Fuller, W., 1979. Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association 74, 427-431.

Elliott, G., Rothenberg T., Stock, J., 1996. Efficient tests for an autoregressive unit root. Econometrica 64, 813-836. http://dx.doi.org/10.2307/2171846

FAO. 2011. ForesSTAT statistical database. Food and Agricultural Organization of the United Nations. Rome, Italy. Online at http://faostat.fao.org/.

Fousekis, P., Pantzios, C., Vakrou, A, 2001. A wood trade flows: An empirical analysis of Greek wood Imports. Journal of Forest Economics 7(3), 225-243.

Hanninen, R., 1998. The Law of One Price in United Kingdom soft sawnwood imports. A cointegration approach. Forest Science 44, 17-23.

Hänninen, R., Toppinen, A., Toivonen, R., 2007. Transmission of price changes in sawnwood and sawlog markets of the new and old EU member countries. European Journal of Forest Research 126 (1), 111-120.

Hetemaki, L., Kuuluvainen, J., 1992. Incorporating Data and Theory in Round Wood Supply and Demand Estimation. American Journal of Agricultural Economics 74(4), 1010-1018. http://dx.doi.org/10.2307/1243199

Hulktrantz, L., Aronson, T., 1989. Factors affecting the Supply and Demand for Timber from Private Nonindustrial Land in Sweden; An econometric study. Forest Science, 946-961.

Johansen, S., 1988. Statistical Analysis of Cointegration Vectors. Journal of Economic Dynamics and Control 12, 231-254. http://dx.doi.org/10.1016/0165-1889(88)90041-3

Johansen, S., Juselius, K., 1990. Maximum likelihood estimation and inference on cointegration with applications to the demand for the money. Oxford Bulletin of Economics and Statistics 52, 169-210. http://dx.doi.org/10.1111/j.1468-0084.1990.mp52002003.x

Johansen, S., Juselius, K., 1992. Testing structural hypothesis in a multivariate cointegration analysis at the uncovered interest parity for the U.K. Journal of Econometrics 53, 211-244. http://dx.doi.org/10.1016/0304-4076(92)90086-7

Johansen, S., 1996. Likelihood-Based Inference in Cointegrated Vector Autoregressive Models. Advanced Texts in Econometrics. Oxford University Press, Oxford. 267 pp.

Johansson, P., Lofgren, K., 1985. The Economics of Forest and Natural Resources. Basil Blackwell, Oxford.

Johnson, R., 2009. Forest Products Markets. External drivers affecting Swedish forests and forestry. Future Forests, Working Report.

Jung, C., Torodian, K., 1994. The Law of One Price for US Softwood lumber: a multivariate cointegration test. Forest Science 40, 595-600.

Kainulainen, T., Toppinen, A., 2006. Testing integration in main European paper markets under floating and fixed exchange rates. Forest Policy and Economics 9 (4), 372-379. http://dx.doi.org/10.1016/j.forpol.2005.10.004

Kallio, A.M.I., 2001. Analysing the Finnish pulpwood market under alternative hypotheses of competition. Canadian Journal of Forest Research 31 (2), 236-245. http://dx.doi.org/10.1139/x00-168

Koskella, E., Ollikainen, M., 1996. A game theoretic approach to the round wood market with capital stock determination. Vatt Discussion Papers.

Koskella, E., Ollikainen, M., 1998. A game-theoretic model of timber prices with capital stock: an empirical application to the Finnish pulp and paper industry. Canadian Journal of Forest Research, 28 (10), 1481-1493. http://dx.doi.org/10.1139/x98-105

Klonaris, S., Arabatzis, G., 2009. Empirical demand analysis for long-length roundwood in Greece. New Medit: Mediterranean Journal of Economics, Agriculture and Environment 8(3), 54-62.

Koutroumanidis, Th, Zafeiriou, E., Arabatzis, G., 2009. Asymmetry in price transmission between the producer and the consumer in the wood sector and the role of imports: The case of Greece. Forest Policy and Economics 11(1), 56-64. http://dx.doi.org/10.1016/j.forpol.2008.09.002

Mills, J., Prasad, K., 1992. A comparison of model selection criteria. Econometric Reviews 11, 201-233. http://dx.doi.org/10.1080/07474939208800232

Ministry of Environment, Energy and Climate Change, 2010. Activities report of Forest Services for the year 2008. Athens. 2010. (In Greek).

Mutanen, A., 2006. Estimating substitution in coniferous sawnwood imports into Germany. Journal of Forest Economics 22 (1), 71-80.

Osterwald - Lenum, M., 1992. A note with quantiles of the asymptotic distribution of the maximum likelihood cointegration rank statistics. Oxford Bulletin of Economics and Statistics 54, 461-472. http://dx.doi.org/10.1111/j.1468-0084.1992.tb00013.x

Papastavrou, A., 2008. Forest Policy, Pigasus Editions, volume 2.

Reid, H., S. Huq, A. Inkinen, J. Macgregor, D. Macqueen, J. Mayers, L. Murray, R. Tipper. 2004. Using Wood Products to Mitigate Climate Change: A Review of Evidence and Key Issues for Sustainable Development. International Institute for Environment and development. London, UK.

Richardson, J., 1978. Some Empirical Evidence on Commodity Arbitrage and the Law of One Price. Journal of International Economics 8, 341-351. http://dx.doi.org/10.1016/0022-1996(78)90027-2

Ronnila, M., Toppinen, A., 2000. Testing for oligopsony power in the Finnish wood market. Journal of Forest Economics 6 (1), 7-22.

Stamou, N., 1996. The Structure of the Greek Wood and Furniture Industry. Scientific Annals of the Department of Forestry and Natural Resources, Vol. 36 / 1993, 241- 266. Aristotle University of Thessaloniki. (In Greek).

Sims, C., 1980. Macroeconomics and Reality. Econometrica 48(1), 1-48. http://dx.doi.org/10.2307/1912017

Thorsen, B., 1998. Spatial integration in the Nordic timber market: long - run equilibria and short-run dynamics. Scandinavian Journal of Forest Research, 13, 488-498. http://dx.doi.org/10.1080/02827589809383010

Tirole J., 1988. The Theory of Industrial Organization. The MIT Press, Cambridge, MA

Toppinen, A., Kuuluvainen J., 2010. Forest sector modelling in Europe--the state of the art and future research directions. Forest Policy and Economics, 12, 2-8. http://dx.doi.org/10.1016/j.forpol.2009.09.017

Toppinen, A., Toivonen, R., 1998. Roundwood market integration in Finland: a multivariate cointegration analysis. Journal of Forest Economics 4, 241-263.

Tororis, A., 1994. Presidential decree 126/86. Proceedings of meeting of Hellenic Forestry Society, Thessaloniki. Pp. 29-43. (in Greek).

UN. 2005. European forest sector outlook study: main report. United Nations. VARIAN, H. R. 1993. Intermediate Microeconomics, W.W.Norton and Co.

World Bank Food and Agriculture Organization of the United Nations, 2002. Development indicators 2002.




DOI: 10.5424/fs/2112211-01996

Webpage: www.inia.es/Forestsystems