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Market Power in the Log and Lumber Import Market in Japan

Author

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  • Tsaiyu Chang

    (Tsaiyu Chang (corresponding author) is Project Research Fellow at the Asian Natural Environmental Science Center of The University of Tokyo, Tokyo, Japan, email: tsaiyu@anesc.u-tokyo.ac.jp)

  • Masafumi Inoue

    (Masafumi Inoue is Associate Professor at the Asian Natural Environmental Science Center of The University of Tokyo, Tokyo, Japan, email: masafumi@anesc.u-tokyo.ac.jp)

Abstract

Japan imports rather than exports forestry products even though it has ample forestry resources. Moreover, the leading exporters of forest products often have strong market power in the trade market of forestry products. The possibility of incomplete competition in the Japanese wood import market can also be suspected from the fact that the structure of imports of logs and lumber has remained unchanged over the past 10 years. However, there has been limited empirical economic analysis of the timber trade market to support this assertion. In this study, we examine the market power of the primary exporting countries in the Japanese log and lumber market based on the residual demand model. We analysed the import data of forestry products from 1988 to 2010 with respect to every main item exported to Japan. The analysis shows that Canada has market power over several items of logs in the Japanese import market, while the United States and Canada have market power over several items of lumber. The study also clarifies that imperfect competition exists in the Japanese timber import market and that the timber price in Japan is partially determined by the exporting countries. JEL Classification: Q17, Q23, Q27

Suggested Citation

  • Tsaiyu Chang & Masafumi Inoue, 2013. "Market Power in the Log and Lumber Import Market in Japan," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 7(2), pages 131-146, May.
    • Handle: RePEc:sae:mareco:v:7:y:2013:i:2:p:131-146
    DOI: 10.1177/0973801013483501
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    References listed on IDEAS

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    1. Goldberg, Pinelopi Koujianou & Knetter, Michael M., 1999. "Measuring the intensity of competition in export markets," Journal of International Economics, Elsevier, vol. 47(1), pages 27-60, February.
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    Cited by:

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    More about this item

    Keywords

    Wood Import Market; Log and Lumber Trade; Market Power; Residual Demand Model; Japan;
    All these keywords.

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade

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