Browsing by discipline "Forest Economics and Marketing (Forest Resource and Environmental Economics)"

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.

The main objective of this Master’s thesis is to create an overview of the thematic entity of forest, health and economics based on earlier literature. The other objective is to demonstrate how to value these benefits with a computional estimation. There is lot of research made on the health benefits of forests or green space to human and strong evidence of those benefits. In this study the aspect of physical activity was chosen because the independent recreational use of forests can usually be classified as health enhancing physical activity, and in addition there are similarities between the health benefits of natural environment and physical activity. Health benefits can be valued by various methods. Commonly used methods are based on the value of statistical life or cost of illness and lost productivity from time off work. The Health Economic Assessment Tool (HEAT) created by World Health Organization was used for the computional estimation in this study. The mechanism of HEAT is based on the value of statistical life. Furhermore a rough estimate of the value of health benefits based on cost of illness is presented. The computional estimation is based on a fictional 100 hectare forest situated nearby a city. The population living half a kilometer radius from the forest was estimated with the population density data of Helsinki. The value of health benefits for the population of 5000 working aged is remarkable: depending on the method the value can be over two million euros yearly. The value of health benefits is greater than the potential average annual earning of the forest used for wood production, yet smaller than the value of that area used for building. The economic value of health benefits of forests is considerable, especially in cities with high population density or nearby them. This study gives a scratch of the economic value of the health benefits of recreational use of forests and there is strong demand for further study on the subject. However, by taking the advantage of existing knowledge of the subject it is possible to make estimations of the value of health benefits, and those estimations should be used more often in policy making.

This study analyzes the optimal harvesting of single species uneven-aged Norway spruce (Picea abies (L.) Karst.), Scots pine (Pinus sylvestris L.), and birch (Betula pendula Roth. and B. pubescens Ehrh.) stands, in addition to mixed species stands with all three species. The analysis is based on an economic description of uneven-aged forestry using a size-structured transition matrix model and a single-tree model. The optimization problem is solved in its general dynamic form using gradient-based interior point methods. Similar analysis on uneven-aged birch, Scots pine and mixed species stands in Nordic conditions has not been published. Increasing the harvesting interval decreases the average annual volume yield. Assuming natural regeneration, this suggests that volume yield is maximized by uneven-aged rather than even-aged management. The present value of stumpage revenues is maximized after saw timber and pulpwood prices, interest rate, and a 15-year harvesting interval are included. The economically optimal solution with a 3% interest rate produces an annual yield of 1.9, 5.5 and 2.9 cubic meters (m3) for Scots pine, Norway spruce, and birch respectively in single species stands at site with average productivity. At less productive sites, the mixed species stand is heavily dominated by Norway spruce regardless of interest rate. At more productive sites on the other hand, increasing interest rate increases species diversity. Both the optimal volume yield and net present value maximization solutions converge to unique species- and site-type-specific steady-states with constant harvests. The transition matrix model typically used in optimization studies is computationally less demanding than the single-tree model, but the differences in optimal solutions are more remarkable than earlier studies show. Additionally, it appears that the investmentefficient optimization model may result in steady-state solutions that significantly differ from the correct solutions.

The aim of this study is to outline what does the complaint for the European Commission concerning unlawful state aids for the forestry organisations reveal about Finnish forestry. In the complaint the competitive position of the Finnish Forestry Centre and Forest Management Associations is described unfair and the flaws of competition in the forest management services are shown serious. The focus of the thesis is to analyse the complex role of the Finnish private forestry organisations through the issues of governance and competition. The research method is a descriptive literature review. The case is described as detailed as possible through its history and political and economic circumstances. The literature consists of books, documents and articles. The topic is approached in the competition legislation framework, in particular, within the control of state aids. In the case the discontent with dominant forestry practices of a private forest owner was converted into a national issue by taking it to the EU level. Through the EU’s state aid regulation and monitoring it was possible to influence the national institutions, which, without complaint, would have been impossible or, at least, slow. Looking at the background of the organisation and state aid system in the Finnish forestry emerged much regularity, which supported the complaint argumentation. The results showed that the established practices and, as well as, organisations’ administrative and operational connections have strongly influenced on how the forestry market activities have evolved and the challenges in operating environment have been addressed. In fact, the problems related to the organisational system and competition setup can be seen occurred in four different forms, which are illustrated with the following themes: general interest, long-established operations models, self-interest and passivity.