THE ANTECEDENTS AND CONSEQUENCES OF COOPERATIVE ARRANGEMENTS INHIBITING THE EMERGENCE OF COOPERATIVE STRATEGIES OF LATVIAN FOREST OWNERS

Abstract

This empirical paper focuses on the specific questions related to market-competition among profit-driven firms versus more cooperative inter-firm arrangements. The share timber produced by the forest owners organizations vary from 31% in Finland to 75% of the total share in Norway. However, Latvia is very unique regarding forestry cooperatives; there were no forest owners’ cooperatives at all until 2012 year. The aim of the empirical study is to investigate internal and external setting that underpins the commercial viability of strategic choice of cooperative strategies of the Latvian forest owners (FO). We collected primary data by means of interviews and questionnaires answered by experts from the forest sector in Latvia. Our research results illustrate that according to experts’ evaluation the group that is the most interested in cooperation is the one that owns 20-50 ha forest and constitutes 26% of the private forest area; thus it provides a very good potential for forest owners’ cooperation. The research findings show that forest owners’ cooperatives have opportunities to build their combined competitive advantage through better exploiting their resources and developing new capabilities in order to capture more economic rent. Availability of the EU funds for forestry activities can also be better used by a cooperative than a single FO.

DOI: http://dx.doi.org/10.5755/j01.em.19.1.5992