Identification of structural breaks in the forest product markets: how sensitive are to changes in the Nordic region?

Tahamina Khanam (), Abul Rahman, Blas Mola-Yudego and Jouni Pykäläinen
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Tahamina Khanam: University of Eastern Finland
Abul Rahman: University of Eastern Finland
Blas Mola-Yudego: University of Eastern Finland
Jouni Pykäläinen: University of Eastern Finland

Mitigation and Adaptation Strategies for Global Change, 2017, vol. 22, issue 3, No 6, 469-483

Abstract: Abstract Forests play a fundamental role in the global carbon cycle and can be managed to mitigate greenhouse gas emissions and conserve or sequester carbon. Global policy and environmental changes can affect regional consumption of forest products, as well as inter-regional trade of forest goods and services. This study analyzes global and regional change impacts on the production, consumption and trade of forest products in two Nordic countries, Finland and Sweden. Annual data on removal and trade (1964–2012) for roundwood and sawnwood is used to identify structural breaks based on Chow tests. According to the analysis, the time period is divided into two periods: t1 (1964–1980) and t2 (1981–2012). In the first period, breaks occurred in 1975 and 1976 in the Finnish model and no break is found in the Swedish model. In the second period, we identify breaks in 1991 and 1992 for the Finnish model and in 2004, 2005 and 2006 for the Swedish model. Although our findings have broad empirical support, we do not identify any specific incident as a direct cause of the changes in the consumption and trade patterns of the two types of wood in these countries. The models and analysis presented here can serve as methodological tools for policymakers to better understand the effects of structural changes in the production of forest goods and services in the Nordic region and globally.

Keywords: Chow test; Global change; Regional change; Roundwood; Sawnwood; Structural break; Finland; Sweden (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s11027-015-9681-9

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