On the importance of forest assets for micro-firm performance
2013 (English)In: Fennia, ISSN 0015-0010, E-ISSN 1798-5617, Vol. 191, no 2, 122-142 p.Article in journal (Refereed) Published
Business start-ups are on the increase, a development which is accompanied by hopes that these new firms will generate a potential for, e.g., local and regional development and a strengthening of local labour markets as well as the national economy. However, the long-term performance and viability of new firms are often rather poor. This research aims to analyse the importance of ownership of areal resources in the form of forest holdings for the performance of Swedish micro-firms. The analyses are based on official register data and fixed-effects panel regression modelling. A hypothesis is that a firm whose owner also possesses forest holdings is more viable thanks to the different resources (in the form of capital from logging or mortgaging, or non-pecuniary other values) the forest holdings may provide, and which possibly contribute to the firm’s economic stability and resilience to economic fluctuations. From a general point of view, we find support for the hypothesis that forest ownership positively and significantly influences firm performance in terms of earnings before interest and taxes (EBIT), but not in terms of value added. Forest ownership is never detrimental to firm performance, although it does not have a significant effect in all sub-categories of entrepreneurs based on different combinations of age, gender and firm type. Particularly, the economic performance of private firms run by older men benefits from resources stemming from their forest holdings. No significant effects were found for female entrepreneurs or for limited companies. As regards regional variations, firms located outside the metropolitan regions – as compared to those at the top of the urban hierarchy – are likely to perform better, thus indicating that local development may benefit from resource transfers from the forest sector to micro-firms engaged in non-primary activities.
Place, publisher, year, edition, pages
Suomen Maantieteellinen Seura , 2013. Vol. 191, no 2, 122-142 p.
micro-firms, firm performance, entrepreneurship, local development, forest ownership, panel regression, Sweden
Social and Economic Geography
Research subject Social and Economic Geography
IdentifiersURN: urn:nbn:se:umu:diva-82773DOI: 10.11143/7965OAI: oai:DiVA.org:umu-82773DiVA: diva2:663094