The purpose of this academic economic geographical dissertation is to study and describe

how competitiveness in the Finnish paper industry has developed during 2001–

2008. During these years, the Finnish paper industry has faced economically challenging

times. This dissertation attempts to fill the existing gap between theoretical and

empirical discussions concerning economic geographical issues in the paper industry.

The main research questions are: How have the supply chain costs and margins developed

during 2001–2008? How do sales prices, transportation, and fixed and variable

costs correlate with gross margins in a spatial context?

The research object for this case study is a typical large Finnish paper mill that exports

over 90 % of its production. The economic longitudinal research data were obtained

from the case mill’s controlled economic system and, correlation (R2) analysis

was used as the main research method. The time series data cover monthly economic

and manufacturing observations from the mill from 2001 to 2008.

The study reveals the development of prices, costs and transportation in the case

mill, and it shows how economic variables correlate with the paper mills’ gross margins

in various markets in Europe. The research methods of economic geography offer perspectives

that pay attention to the spatial (market) heterogeneity. This type of research

has been quite scarce in the research tradition of Finnish economic geography and supply

chain management. This case study gives new insight into the research tradition of

Finnish economic geography and supply chain management and its applications.

As a concrete empirical result, this dissertation states that the competitive advantages

of the Finnish paper industry were significantly weakened during 2001–2008 by low

paper prices, costly manufacturing and expensive transportation. Statistical analysis exposed

that, in several important markets, transport costs lower gross margins as much

as decreasing paper prices, which was a new finding. Paper companies should continuously

pay attention to lowering manufacturing and transporting costs to achieve more

profitable economic performance. The location of a mill being far from markets clearly

has an economic impact on paper manufacturing, as paper demand is decreasing and

oversupply is pressuring paper prices down. Therefore, market and economic forecasting

in the paper industry is advantageous at the country and product levels while simultaneously

taking into account the economic geographically specific dimensions.