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Browsing by Subject "Transaction Cost Economics"

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  • Ilonen, Iikka-Santeri (2015)
    Since 1980s the major global forest industry enterprises have been renounced their forest holdings in Northern- America and sold them for the public and private institutions as well as for the private investors. Since 1990s until 2010s corresponding renouncement have been distinguished also in Europe. Especially because of the quarterly reporting the trend between major global forest industry enterprises have been towards renouncing fixed capital in desire to satisfy the needs of investors. In the beginning of the millennium the global forest products companies have been transposing manufacturing into emerging markets. The predicted growth opportunities and demand expectations in regard to forest based products are cut out for induce the global forest industry enterprises to invest in forest holdings in emerging markets. The increasing competition of bare land in emerging markets has been a major driver to switch the strategy of global forest industry enterprises back into vertical integration in lieu of buying the raw material from the markets. This Master’s Thesis takes a look at the relationship between timberland ownership (vertical integration) and financial performance of a forest industry enterprise. In addition this thesis aspires to substantiate whether there exists a relationship between timberland ownership and the geographical location of operations of a global forest industry enterprise. The material covers review of literature, the theories of industrial economics, annual reports of forest industry enterprises and the survey of TOP 100 global forest, paper and packaging industries. (PricewaterhouseCoopers 2007; 2012). Statistical hypothesis test and descriptive statistics are utilized to analyze the results received from the annual reports and the surveys of TOP 100 global forest paper and packaging industries. Conclusions regarding the relationship between timberland ownership and financial performance are drawn from the results received. In addition the results produce information on the current state of the timberland holdings between the TOP 100 major global forest industry enterprises. Quantitative data behind this study has been collected from years 2007 and 2012. The findings of this study verifies the trend towards timberland ownership between major forest industry enterprises. Regarding on the results attained from the statistical test there exists a positive correlation between timberland ownership and financial performance. In the future especially the prices of raw material, prices of bare land and prices of end- product will continue to play a crucial role for the profitability of global forest industry enterprises. Finally, it is interesting to see in the future how the green economics will shape the Forest Industry and what kind of an impact it will have for the profitability and forest ownership of global forest industry enterprises.