Gap-type Model Research Articles

U.S. Trade in Transition—An Econometric View of South Sea Wood Flows

Abstract There were distinct stages of growth and development in the 1960s and 1970s in the flow of South Sea tropical hardwood as it made its way from the forests of Indonesia, East Malaysia, and the Philippines to the transit plywood-manufacturing plants of Japan, South Korea, and Taiwan, and thence to U.S. markets. In the introductory stage, the dominant end-use was flush-doors, the dominant manufacturer was Japan, and the dominant provider of logs was the Philippines. The expansionary phase started in the early 1960s and was characterized by a dramatic rise in South Korean and Taiwanese plywood exports which found distinct niches in the U.S. market. By its end, in the early 1970s, these countries supplied, respectively, 60% and 30% of U.S. demand. A quasi-spatial econometric model was used to investigate plywood and log flows over the 1962-1979 period. The consequences of SEALPA log export restrictions that started around 1980 were analyzed using estimated reduced-form relationships and a gap-type model. Future U.S. imports of South Sea plywood are expected to be around 60% of the peak level reached in the early 1970s, with more than 80% of them coming from Indonesia. For. Sci. 36(2):425-437.