Main determinants of export-oriented bleached eucalyptus kraft pulp (BEKP) demand from the north-western regions of Spain

The aim of this article is to shed light on the most important determinants of bleached eucalyptus kraft pulp (BEKP) exports from the northwest coastal regions of Spain (i.e., Galicia and Asturias). The current study overcomes the problems of spurious regressions and non-stationary time series through cointegration. The research involves both testing the existence of a long-term equilibrium relationship between the variables and the estimation of an error correction model (ECM). The findings show that the Spanish BEKP exports from Galicia and Asturias are significantly affected by the economic conditions registered in Europe, and favoured by the inflationary processes of the main competing developing countries (Brazil, Chile, Uruguay). However, this competitive advantage has been offset through the fall of the external value of competing countries' currencies against the Euro. In addition, the results also indicate that new investments in plantation pulp and factories in competing developing countries reduce the competitiveness of the BEKP industry in north west Spain.