| Title |
Financial performance in Finnish large- and medium-sized sawmills: The effects of value-added creation and cost-efficiency seeking |
| ID_Doc |
74471 |
| Authors |
Lähtinen, K; Toppinen, A |
| Title |
Financial performance in Finnish large- and medium-sized sawmills: The effects of value-added creation and cost-efficiency seeking |
| Year |
2008 |
| Published |
Journal Of Forest Economics, 14, 4 |
| DOI |
10.1016/j.jfe.2008.02.001 |
| Abstract |
The business environment of Finnish sawmill industry has changed notably since the 1990s. As a result of these changes, maintaining competitiveness and acceptable business success in sawmilling is more challenging than before. Manufacturing higher-priced value-added timber products has been highlighted as the main option for achieving sustainable financial performance, but its outcome has not been studied previously. In this paper, the effects of cost- and value-added components on the firm-level financial performance of 27 large- and medium-sized Finnish sawmills in 2000-2004 are evaluated by using regression analysis. The proportions of material and salary expenses of turnover are applied as measures of relative cost-efficiency. The commitment to value-added creation is assessed by the share of investments and value-added of the turnover. The results indicate that cost-efficiency indicators explain shorter-term financial performance better, than value-added creation, which affects longer-term financial performance and future turnover growth. Thus, from the managerial point of view, in the short term, cost-efficiency is a prerequisite for the business, while in the long term, value-added creation is also needed to support the economic sustainability of the business. (c) 2008 Elsevier GmbH. All rights reserved. |
| Author Keywords |
Value-added; Cost-efficiency; Strategy; Large- and medium-sized sawmills; Financial performance |
| Index Keywords |
Index Keywords |
| Document Type |
Other |
| Open Access |
Open Access |
| Source |
Science Citation Index Expanded (SCI-EXPANDED); Social Science Citation Index (SSCI) |
| EID |
WOS:000261808400005 |
| WoS Category |
Economics; Forestry |
| Research Area |
Business & Economics; Forestry |
| PDF |
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