New Zealand forestry - an analysis of comparative advantage

Authors: Satya Gonuguntla
Publication: New Zealand Journal of Forestry, Volume N.Z.J.For. 2006, Issue N.Z.J.For. 51(4) 2007, pp 21-27, Jan 2007
Publisher: New Zealand Institute of Forestry

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Abstract: New Zealand is endowed with natural resources such as land, soil and climate giving rise to comparative advantage in the production of land-based products. A study into New Zealand’s comparative advantage found that New Zealand lost comparative advantage in some forestry products in 1999 compared to 1985. The Ministry of Agriculture and Forestry in its latest publication, SONZAF highlighted the strong competition from Canada and the Russian Federation in some of our major export markets viz., China, Japan, and Korea. Both these conclusions imply that New Zealand’s comparative advantage in forestry sector is undermined by increasing comparative advantage of its competitors. This study shows that New Zealand’s comparative advantage decreased in low value products but increased in high value products within the forestry sector and there is a good potential to increase high value products particularly to China. 

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