Abstract
The objective of the presented study is to analyze the competitiveness of the German forest industry sector against the background of the international timber markets. The analysis is conducted based on global bilateral trade data in monetary terms. Timber commodities are grouped according to twelve commodity classes; each class is clearly attributed to one of the three processing levels raw wood, semi-finished and finished wood products. After an introductory description of the structure and development of the global timber market, two result-oriented competitiveness indicators have been applied: the revealed comparative advantage (RCA), which indicates whether a country is specialized in a specific sector—the RCA analysis has been conducted by means of the two consecutive indices Balassa index (BI) and Aquino index (AI)—and in addition the constant market share (CMS) analysis, which disaggregates the overall export growth of a country into four different effects: (1) the world growth effect, (2) the commodity-composition effect, (3) the market-distribution effect and (4) a residual, which usually is interpreted as the competitiveness effect. Depending on the chosen indicator, results are given for 21 and 25 leading countries (RCA and CMS, respectively). The highest BI values are shown by Russia for raw wood (10.4), by Finland for semi finished wood products (11.3) and by Poland for finished wood products (4.7). The AI shows that countries which are specialized in timber commodity exports mostly are significant timber importers, as well. This is an indication of their integration in an intra-industry trade. Germany only has a BI value somewhat greater than 1 for finished wood products. This can be seen as an indication of merely an average competitiveness position in global timber markets. The CMS analysis delivers two key results: most of the leading timber exporters in absolute terms show only low export growth rates and vice versa. Furthermore, a strong positive relationship can be identified between a country’s timber export growth rate and its competitiveness effect. Most of the Eastern European and many Asian and Latin American countries show this pattern, as they have high growth rates and high positive competitiveness effects. Germany’s export growth can be attributed much more to the overall world growth in timber markets than to its forest industry capacity. Hence, a stagnation of world growth would have crucial effects on the German forest industry sector.
Similar content being viewed by others
Notes
For a more precise survey of this regional classification see Ollmann (2003, p. 3)
References
Algieri B (2004) Trade specialisation patterns: the case of Russia. Bank of Finland BOFIT-Institute for Economies in Transition, Discussion Paper 2004 no. 19
Aquino A (1999) Aspetti Empirici Essenziale del Processo di Globalizatione. In: Acocella N Globalizzaione e Stato Sociale (ed) Il Mulino. Cited from: Algieri B (2004) Trade specialisation patterns: the case of Russia. Bank of Finland BOFIT-Institute for Economies in Transition, Discussion Paper 2004 no. 19
Balassa B (1962) Recent developments in the competitiveness of American industry and prospects for the future. In: Joint Economic Committee (ed) Factors affecting the United States balance of payments. U.S. Congress, Washington, pp 27–54
Balassa B (1965) Trade liberalization and revealed comparative advantage. Manch Sch Econ Soc Stud 33:99–123
Balassa B (1977) “Revealed” comparative advantage revisited: an analysis of relative export shares of the industrial countries, 1953–1971. Manch Sch Econ Soc Stud 45:327–344
Bourke IJ, Leitch J (1998) Trade restrictions and their impact on international trade in forest products. Food and Agriculture Organization of the United Nations, Rome
Chen K, Duan Y (2000) Competitiveness of Canadian agri-food exports against competitors in Asia: 1980–97. J Int Food Agribus Market 11(4):1–17
Chen K, Xu L, Duan Y (2000) Ex-post competitiveness of China’s export in agri-food products: 1980–96. Agribusiness 16(3):281–294
Donges J, Riedel J (1977) The expansion of manufactured exports in developing countries: an empirical assessment of supply and demand issues. Weltwirtschaftliches Archiv 113(1):58–87
Gries T, Hentschel C (1994) Internationale Wettbewerbsfähigkeit - was ist das? Wirtschaftsdienst VIII, pp 416–422. HWWA-Institut für Wirtschaftsforschung, Hamburg
Jepma C (1986) Extensions and application possibilities of the constant market shares analysis—the case of the developing countries’ exports. University Groningen, Groningen
Kunimoto K (1977) Typology of trade intensity indices. Hitotsubashi J Econ 17:15–32
Laursen K (1998) Revealed comparative advantage and the alternatives as measures of international specialisation. Danish Research Unit for Industrial Dynamics. DRUID Working Paper No. 98-30
Leamer E, Stern R (1970) Quantitative international economics. Allyn and Bacon Inc, Boston
Milana C (1988) Constant-market-share analysis and index number theory. Eur J Polit Econ 4:453–478
Neven D (1995) Trade liberalization with Eastern Nations: how sensitive? In: Faini R, Portes R (eds) European Union Trade with eastern Europe: adjustment and opportunities, CEPR
Ohlin B (1933) Interregional and international trade. Havard University Press, Cambridge
Ollmann H (2003) Struktur des Weltholzhandels 1999 - Handelsströme. Working paper 2003/5 of the Institute for Economics of the Federal Research Centre for Forestry and Forest Products, Hamburg. http://www.bfafh.de/bibl/pdf/iii_03_05.pdf
Organisation for Economic Co-operation and Development (OECD) (2003) National accounts and economic statistics—international trade statistics. STD/NAES/TASS/ITS(2003)13; Paris
Richardson J (1971) Some sensitivity tests for a “constant-market-shares” analysis of export growth. Rev Econ Stat LIII(4):300–304
Samuelson P (1953) Prices of factors and goods in general equilibrium. Rev Econ Stud 21:1–20
Vollrath T (1991) A theoretical evaluation of alternative trade measures of revealed comparative advantage. Weltwirtschaftliches Archiv 127(2):265–280
World Trade Analyzer (2004) 1985–2002. Statistics Canada, Ottawa
Acknowledgments
The authors would like to thank the two anonymous reviewers for their very helpful and substantial comments and also our colleague Frank Setzer for many brisk discussions about indices and their interpretation.
Author information
Authors and Affiliations
Corresponding author
Additional information
Communicated by Martin Moog.
Rights and permissions
About this article
Cite this article
Dieter, M., Englert, H. Competitiveness in the global forest industry sector: an empirical study with special emphasis on Germany. Eur J Forest Res 126, 401–412 (2007). https://doi.org/10.1007/s10342-006-0159-x
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10342-006-0159-x