Browsing by Subject "metsäplantaasi"

Direct investments are considered the main source of economic growth and are desirable for countries. Factors driving the geographical distribution of direct investments are unknown. Many forest investments are directed to plantations, which have expanded rapidly during the past two decades. The global forestry scheme is changing; until 1990, developed countries accounted for almost all investments. Since then, developing countries have started to employ them at an accelerating rate. The major changes in a world economy are likely to drive this trend in the future. To assess factors contributing to investment in forest plantation, we drew from methods used by the Inter-American Development Bank (IADB), which developed a forest attractiveness index (IAIF) to ?measure the business climate to sustainable forest business?. In this research, several multiple linear regression models were developed to examine the effects of different variables. As well, different macro-economic, institutional, and forest-sector factors were considered the main components that drive forest plantation development. Factors attracting direct investment in forest plantations are different on a global scale, in developed and developing countries. Therefore, some general trends can be identified: Macro-economic factors are important. Foreign direct investment inflows and area of planted forests are positively correlated, indicating that the investment behavior of forestry investors is not significantly different from other investors‘. Other significant factors are GDP and the exchange rate. GDP was positively correlated with the area of planted forests. Weak currency is desirable in OECD countries, and a strong currency is favorable for plantation investments in non-OECD countries. Institutional factors were not significant, which suggests investments occur despite the country challenges. The human development index was the most significant factor in this category. The human development index had a negative effect on the area of planted forests. The more developed a country, the fewer plantations. The forest-sector factors were the most important factors that determine plantation investment attractiveness. Production capacity and productivity were globally significant. Productivity was not significant in non-OECD countries, which may have equally beneficial circumstances for tree growth. Macro-economic factors are important especially in these countries. The results suggest macro-economic and forestry factors are key determinants of investment attractiveness in forestry. Macro-economic factors cannot be affected by investors. Forestry-factors can be affected by country level decision making. Investors can choose between countries, and sometimes affect these factors. These results may be useful to firms considering foreign direct investment and to policy makers in potential destination countries.