An Econometric Analysis of Imported Softwood Log Markets in South Korea - -on the basis of the lagged dependent variable-

Abstract

The objective of this study is to know market structures of softwood logs being imported to South Korea from log producing countries. Import demand of softwood logs imported to South Korea from America, New Zealand and Chile is fixed as a function of log prices, the lagged dependent variable and output. On the basis of the adaptive expectations model, linear regression models that the explanatory variables included and the lagged dependent variable were estimated by Seemingly Unrelated Regression Equations (SURE). The short-run and long-run own price elasticity of America's softwood log import demand is -1.738 and -4.250 respectively. Then long-run elasticity of New Zealand's softwood log import demand with respect to American's softwood log import price are inelastic as 0.505 and 0.883 respectively. Shot-run and log-run cross-elasticity of Chile's softwood log import demand with respect to American's softwood log import prices were highly elastic at 2.442 and 4.462 respectively. Long-run elasticity was almost twice as high as short-run elasticity.