Essays on Forestry Products Industry: Sawmill Productivity and Industrial Timberland Ownership
Type of DegreeDissertation
Forestry and Wildlife Sciences
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In this dissertation, two topics of forest products industry were investigated: inter-regional productivity comparison of sawmilling industries in the North America, and the relationship between industrial timberland ownership and corporate financial performance in the U.S. The first study used nonparametric programming approach to estimate technical efficiency and total factor productivity (TFP) growth of sawmill industries in the U.S. and Canada between 1963 and 2001 The results showed that the U.S. sawmill industry was more likely to be on the industry frontier than Canada during 1990-2001 although the Canadian sawmill industry was shown more efficient compared to the U.S. counterpart during 1963-1989. The weighted annual productivity growth of sawmill industry was 2.5% for the U.S. and 1.3% for Canada. Regional differences in technical efficiency and TFP growth existed. All regions were shown to have a trend of moving towards the industry frontier. Assumption of Hicks neutrality in production was rejected for both countries. Bootstrap results suggested that both countries experienced statistically significant productivity growth and the U.S. had a higher rate of growth during the whole study period although the estimates may be sensitive to outliers. The second study presented an empirical analysis of the relationship between industrial timberland ownership and financial performance of forestry products companies in the U.S. A three stage least square (3SLS) model system was used for estimation. The results showed that generally timberland holding may improve a forest products company’s profitability in terms of return on asset (ROA) and return on equity (ROE) as well as its ability of response of rate of returns to uncertainty. However, higher capital expense and debt/asset ratio were shown associated with timberland holding. Forest product companies may divest some of their timberland to ease the financial burden.