Modelling birch pulpwood imports to Finland

Recent increases in pulpwood imports to Finland have raised an intense deba te about their possible effects on the domestic wood markets. Since importa nt institutional and structural changes in the market environment have take n place in the markets during the 1990s, it is important to take these into account in modelling imports. Our results consider three different time pe riods between 1986 and 1998, and indicate that market mechanisms in Finnish birch pulpwood imports have improved substantially in the latter part of t he 1990s. Imports are found to be elastic with respect to changes in pulpwo od import price, domestic pulpwood price and pulp export price. Furthermore , imports of birch pulpwood seem to have complemented the domestic market r ather than to have been a substitute for it.