Supply Analysis of the Forestry Industry

Géraud Krähenbühl

No 15-08, IRENE Working Papers from IRENE Institute of Economic Research

Abstract: This paper performs a supply analysis of the Swiss forestry industry at the firm level. It explores the factors affecting quantity of supply, and determines the behavioural characteristics of the forestry firms. Supported by instrumental variables and several proxies, panel data methods are used in the regression analysis, allowing to distinguish several characteristics of firms in this strongly heterogeneous environment. Overall, results suggest that Swiss forestry firms are not acting as profit maximizers. This points towards the possibility that at least some of them could be modelled using a target revenue approach or similar models. Specifically, negative supply elasticities are estimated, with different magnitudes depending on firm characteristics such as ownership and on the econometric model used. Moreover, results indicate a concentration of market power among big forestry firms, which might be of special importance in the bargaining process with sawmills.

Keywords: wood supply; econometric analysis; target revenue model; negative supply elasticity; Switzerland (search for similar items in EconPapers)
JEL-codes: C15 C33 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2015-08
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Persistent link: https://EconPapers.repec.org/RePEc:irn:wpaper:15-08

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