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Economic geographic characteristics in the Finnish paper industry - a case study

Keywords: Economic Geography , Paper industry , Performance , Transportation , Costs

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Abstract:

The main purpose of this paper is to reveal the Finnish paper industry from the economic geographic perspectives. There have been many mill and machine line closures especially in Finland after 2001. Therefore, it is interesting to research the development of manufacturing and transportation costs and paper prices during 2001 2008 in a large case mill. The research tradition of economic geography concerning the paper industry is scanty in the Nordic countries, and not many discussions have been published. This paper attempts to narrow the gap between theoretical and empirical discussions concerning the paper industry. The empirical data is obtained from one large integrated mill, and the research data covers cost components from the years 2001–2008. The results show that the economic performance has lowered clearly in the case mill. An interesting finding was that in overseas distant deliveries, transit costs can even decrease due to inexpensive sea transportation and paper prices slightly increase, probably due to lowered competition in the exported paper qualities.Although the mill data has been examined in detail, it only covers one large paper mill with several machine lines. Therefore, the results can only be generalized to some extent to other export-dependent paper industries operating in peripheral areas with minimal local demand. Our study shows that the empiric methods of economic geography offer interesting views highlighting such spatial heterogeneities in the paper industry. The industry’s location affects competition through transit costs, and this topic should be included more in location and economic studies.

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