Abstract
Industry analysts have indicated that there is a trend toward more value-added production in the Canadian forest industry. This suggests that the value of output has increased relative to the primary resource costs of production, leaving increased returns available for other production costs. In this paper, investigation is made into the manner in which operational scale, network scale, prices and technology affect value-added production in five sectors of the Canadian forest industry. Findings reveal that, on average, the first three factors tend to increase value-added production in many sectors while the last factor tends to have the opposite effect. These results are used to indicate the manner in which value-added policies can be focused, at a sector-specific level, to realize the full value-added potential that the Canadian forest industry has to offer.
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