Dynamic efficiency analysis of primary wood producers in British Columbia

Primary wood manufacturing is one of the key sectors in Canada’s wood industry. The sector has gone through significant changes during the last decade. These changes were caused by a variety of factors, such as technological advancement, market restructuring, and policy and regulation shifts. One of the most affected provincial sectors due to these circumstances was the primary wood products in British Columbia (BC). In order to capture these effects, we studied the efficiency and productivity of BC primary wood producers using Data Envelopment Analysis and Malmquist total factor productivity from 1990 to 2002. The results showed that BC sawmills were highly scale efficient and the major cause for their inefficiency was technical capability rather than scale of operations. The productivity of BC sawmills improved in 2002 compared to that of 1990. This was the result of slight improvement in efficiency of sawmills, but more due to the frontier shift.