Imports of Pulpwood and Price Discrimination: A Test of Buying Power in the Swedish Pulpwood Market

The Swedish pulp and paper industry’s ability to exert monopsony power is tested both with a conjectural variation model, which parameterizes the firms’ expectations about other firms’ behavior, and with a model that estimates country-specific effects and effects of currency fluctuations on import prices. We use industry data for the 1970−1993 period and find only weak evidence of market power, in spite of the apparent lack of competition.