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Paper info: The Impact of Nordic Cluster on the Development of Wood and Forest Industries in Estonia: Regional vs. Domestic Cluster


The Impact of Nordic Cluster on the Development of Wood and Forest Industries in Estonia: Regional vs. Domestic Cluster


Tõnu Roolaht

Place of Publication

The paper was published at the 21st IMP-conference in Rotterdam, Netherlands in 2005.


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The well-developed regional economic clusters have an important position in modern world. Intraclustercooperation helps companies to benefit from integrated value creation that provides severalsynergetic opportunities. One of the most prominent clusters in Nordic area has formed in wood andforest industries. The economic activities in this field extend from roundwood trade and forestreplantation to the production of finest paper and furniture. Although, initially based on high level offorestation in Scandinavia, ecologic as well as economic considerations have facilitated the expansionof the cluster to nearby areas, like Baltic region and Russia. Nordic forestry MNC-s have acquiredthere roundwood procurement companies as well as sawmills. Much less effort has been made inestablishing high-end production processes, like pulp and paper production in this area.The aim of this study is to investigate the dual impact of regional clusters on the development localclustering and networking ties. In this respect the positive impact in terms of technology transfers,financial support, and market access are analyzed alongside with potentially more detrimentalaspects, like replacing local value-adding processes with roundwood and paperwood exports andlimiting the international marketing options of acquired producers. In short, the study should point howthe emergence of international network ties impacts the development of local clusters and integratedvalue chain.The results indicate that regional clustering has several positive influences on development oflocal/domestic clusters in terms of technology transfer and foreign market access, but dominant intracorporatenetworks can also lead to centralised operation that set lower value to local supply chainrelationships. However, additional survey evidence shows that among smaller companies local andforeign relational networks within the cluster are more important than intra-corporate ties with parentcompany and its other units. Thus, possible negative impact is for them more indirect than for largerdomestic producers acquired by MNC or regional corporations.