Profit persistence in globalizing forest industry companies

Susanna Laaksonen-Craig, Anne Toppinen

Research output: Contribution to journalArticleScientificpeer-review

Abstract

This study analyzes profit persistence and scale economics of globalizing forest industry using panel data from 49 companies in the US. Canada, Europe and the group of emerging countries between years 1996-2005. Size and profitability of forest industry companies were found to be only weakly related, and there were clear geographical and period specific differences in the data. Time series-cross section unit root tests indicated that oil the global scale there were no persistent firm-specific profits among the largest forest industry companies. However. there wits some evidence of geographical differences as for the Canadian companies some indication of profit persistence wits found, but this could not be fully confirmed as it could be also derived front this sample. The main policy implication of this study is that in the absence of profit persistence, streamlining of operations and cutting down smaller and less profitable production units will likely continue in the forest industry with investors and stock markets valuing short-term economic performance. As this will inevitably have ail adverse impact oil job opportunities and local livelihoods of rural communities in forestry dependent areas, examining interaction between corporate social and economic performance will become more important.
Original languageEnglish
JournalInternational Forestry Review
Volume10
Issue number4
Pages (from-to)608-618
Number of pages11
ISSN1465-5489
DOIs
Publication statusPublished - 2008
MoE publication typeA1 Journal article-refereed

Fields of Science

  • 411 Agriculture and forestry

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