Analysis of India's Plywood Market : Opportunities for foreign and Finnish companies
Montiel, Pablo (2016)
Montiel, Pablo
Hämeen ammattikorkeakoulu
2016
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2016122721505
https://urn.fi/URN:NBN:fi:amk-2016122721505
Tiivistelmä
India is known as one of the most populous countries in the world. Its economic liberalisation occurred in 1991 allowed India to increase the high rate of GDP and became a fast economy. The steadily growing middle-class has improved the local purchasing power and developed the construction sector for housing and infrastructure. Significant investments in these sectors have increased the demand for wood and wood products. As such, the demand for plywood has grown in the domestic market and has opened an opportunity for foreign investors and manufacturer countries to invest in the Indian domestic market of plywood.
Despite the lack of information about Indian wood market, this research aims to complement previous studies related to Indian wood products based on the use of a descriptive and empirical research methods. The PEST analysis and an econometrical demand model are used to provide an overall overview of the Indian plywood market at local and global level; determine the potential drivers that impact the Indian demand for imports of plywood; and propose the current challenges and opportunities for foreign and Finnish investors to explore the plywood market in India.
As in previous studies related to demand models of wood products, this study confirms that the demand for imports of plywood is positively related to consumer income (GDP per capita) but negatively to price variables (Domestic price of plywood). However, the Indian demand for plywood appears to be income elastic but price inelastic.
Additionally, other significant economic activity variables such as population density, economic openness and unemployment were tested to determine the impact of significant cross-price elasticities for products that show to be complements of plywood. Nevertheless, further modelling is recommended for future studies related to wood products in India.
Despite the lack of information about Indian wood market, this research aims to complement previous studies related to Indian wood products based on the use of a descriptive and empirical research methods. The PEST analysis and an econometrical demand model are used to provide an overall overview of the Indian plywood market at local and global level; determine the potential drivers that impact the Indian demand for imports of plywood; and propose the current challenges and opportunities for foreign and Finnish investors to explore the plywood market in India.
As in previous studies related to demand models of wood products, this study confirms that the demand for imports of plywood is positively related to consumer income (GDP per capita) but negatively to price variables (Domestic price of plywood). However, the Indian demand for plywood appears to be income elastic but price inelastic.
Additionally, other significant economic activity variables such as population density, economic openness and unemployment were tested to determine the impact of significant cross-price elasticities for products that show to be complements of plywood. Nevertheless, further modelling is recommended for future studies related to wood products in India.