Etla » growth

Innovation Does Not Equal R&D. Strategic Innovation Profiles and Firm Growth

Jyrki Ali-Yrkkö — Wed, 27 Oct 2010 08:14:30 +0000

In this paper, we examine firm innovation and its link to firm growth. Instead of using the conventional conceptualization and operationalization of innovation in terms of the R&D budget, we use a more elaborate 12-dimensional conceptualization, which takes into account also the non-technological aspects of innovation. The 12-dimensional operationaliza-tion further enables the examination of strategic innovation profiles of individual firms. We find that different kinds of innovation activity all have effects on firm growth, but in different ways. R&D activity is important in that it leads to introduction of new products, but innovation in other dimensions – value chain strategy, brand, and distribution channels – is also linked to new product introduction. Value chain innovation is also related to the development and introduction of new services: innovation aimed at development and improvement of the customer experience in particular has a significant role in the development and introduction of new services.

JEL: L86, L8, L25
Publication year: 2010
Pages: 22
Price: 10 €
Language: English
Discussion Papers no.1220

Marginal Intra Industry Trade Expansion and Productivity Growth

admin — Wed, 19 Nov 2008 11:00:00 +0000

We use the concept of marginal intra-industry trade (MIIT) to analyse the effect of trade expansion on labour productivity growth across 23 EU countries and 94 manufacturing sectors in 1995-2005. The highest MIIT index values are found in sectors producing differentiated goods as well as in science and scale-intensive sectors, while the lowest are found in resource and labour-intensive sectors. Thus specialisation in sectors characterised by traditional comparative advantage has been associated with slower productivity growth. The results indicate that a trade-flow expansion characterised by intra-industry trade (high MIIT) is associated with faster productivity growth also after we control for the size in trade flow changes. Especially the increase in imports seems important. The analysis is mostly done using random-effects linear model specifications but further evidence is presented using several other estimation methods.

JEL: J24, F1, C23
Publication year: 2008
Pages: 21
Price: 10€
Language: English
Discussion Papers no. 1164

The Impact of Technological and Non-Technological Innovations on Firm Growth

admin — Thu, 13 Nov 2008 11:00:00 +0000

This study investigates the relationship between innovations and firm growth, based on the data of Finnish firms operating in the software industry. We find that in terms of turnover and employment, firms with only technological innovations do not grow more rapidly than other firms. However, firm growth is positively associated with the combination of technological and non-technological innovations.

JEL: O3, O33, L2
Publication year: 2008
Pages: 19
Price: 10€
Language: English
Discussion Papers no. 1165

Does Inter-Organizational Networking Support Regional Development? Evidence from a Survey of Finnish Enterprises

Mika Pajarinen — Tue, 07 Oct 2008 11:00:00 +0000

Three fourths of Finnish business enterprises have relationships that are deeper than those associated with normal market transactions, i.e., they are involved in inter-organizational networking. Regionally networking is more commonplace in North Savo, North Karelia/Kainuu, Central Finland and Lapland/Northern Ostrobothnia. Connections to other firms is the most prevalent and qualitatively most important type of networking. Net-working is predominantly a local phenomenon, particularly when it comes to firms partner-ships with educational and research institutions as well as public bodies. Networking may be associated with better firm profitability in low-tech industries. Participating in a national cluster may be associated with firms better growth prospects. In the absence of functioning local markets for some productive inputs, being engaged in inter-organizational networking may be a necessary conditions for firms survival.

JEL: D21, L14, L22, L25
Publication year: 2008
Pages: 93
Price: 10€
Language: Finnish
Discussion Papers no. 1157

Growth Prospects of Emerging Market Economies in Europe – How Fast Will They Catch up with the Old West?

admin — Sun, 30 Dec 2007 11:00:00 +0000

Using a neo-classical growth model, we analyse the real and nominal GDP per capita convergence of 21 emerging market economies (EMEs) of Central and Eastern Europe towards the EU15 average by 2050. We estimate the countries initial capital stocks and project future investment as a function of the GDP per capita gap, among other things, in order to have converging physical capital intensities in the long run. Due to standard-convergence in the model, catching up will continue at a decelerating speed. Also nominal convergence in prices that will lead to a real appreciation of the EME currencies with respect to the euro is projected as a function of the GDP-per-capita gap vis-à-vis the EU15. We also discuss whether the level of human capital in the EMEs is likely to allow for full catching up. We argue that the EU membership of most of the EMEs is likely to improve their economic, investment and business environments and lead to economic and other policies that support long-term convergence. According to the results, the EMEs will not quite catch up with the EU15 by 2050. However, our analysis of the uncertainty related to the growth rates and calculations of a confidence band for the results, as well as a qualitative assessment of other factors (politics, institutions, human capital) that have not been taken into account in the model explicitly lead us to conclude that some of the EMEs are likely to catch up with the EU15 average during the course of the next couple of decades.

JEL: O47
Publication year: 2007
Pages: 46
Price: 10€
Language: English
Discussion Papers no. 1115

The Impact of Foreign Ownership on Company Growth

Jyrki Ali-Yrkkö — Mon, 02 Apr 2007 11:00:00 +0000

This study analyses foreign-owned companies operating in Finland.
Between 2001 and 2003 760 foreign companies either established a new site or
acquired an existing unit in Finland. The goal of this paper is to study the develop-
ment of these units. The results of statistical analyses are two-fold. First, estab-
lished foreign-owned units (greenfields) have increased their employment annually
on average 13-15 percent more than domestic-owned units established in the same
period. Furthermore in terms of net sales, foreign-owned units grew, on average,
10-12 percent more rapidly than domestic units. Second, the impact of foreign
ownership differs between greenfield investment and acquisitions. The results sug-
gest that the impact of ownership change on employment and on net sales is simi-
lar in domestic-to-foreign deals as in other deals.

Publication year: 2007
Pages: 24
Price: 10€
Language: Finnish
Discussion Papers no. 1081

Productivity, Hours Worked, and Tax/Benefit Systems in Europe and Beyond

admin — Wed, 03 May 2006 11:00:00 +0000

We analyse the development of labour productivity and hours worked by the working-aged population in the EU25 countries and other OECD countries in 1960-2004. We emphasise the possible effects of taxes, benefits and other labour-market variables. First, we describe the trends in productivity and hours worked especially in the EU15 countries relative to the United States. Then we use both cross-section analyses of the 1995-2004 period and pooled least squares panel data analyses of the 1960-2004 period to explain the developments. Taxes and gross replacement rates do not correlate with productivity growth. Instead, productivity growth is influenced positively by investment into fixed assets, R&D and ICT, higher levels of education, and lower product market regulation. According to the results, taxes and gross replacement rates do have a negative effect on the average number of hours worked. Also the ratio between collective bargaining coverage and trade union density as well as higher product market regulation seem to have a negative effect on the number of hours worked.

JEL: O47, J24, O57, C33
Publication year: 2006
Pages: 34
Price: 10€
Language: English
Discussion Papers no. 1015

Age, Technology and Labour Costs

Mika Maliranta — Mon, 03 Apr 2006 11:00:00 +0000

Is the process of workforce aging a burden or a blessing for the firm? Our paper seeks to answer this question by providing evidence on the age-productivity and age-earnings profiles for a sample of plants in three manufacturing industries (forest, industrial machinery and electronics) in Finland. Our main result is that exposure to rapid technological and managerial changes does make a difference for plant productivity, less so for wages. In electronics, the Finnish industry undergoing a major technological and managerial shock in the 1990s, the response of productivity to age-related variables is first sizably positive and then becomes sizably negative as one looks at plants with higher average seniority and experience. This declining part of the curve is not there either for the forest industry or for industrial machinery. It is not there either for wages in electronics. These conclusions survive when a host of other plausible productivity determinants (notably, education and plant vintage) are included in the analysis. We conclude that workforce aging may be a burden for firms in high-tech industries and less so in other industries.

JEL: D24, J24, J31, E60
Publication year: 2006
Pages: 48
Price: 10€
Language: English
Discussion Papers no. 1010

Integration and Conditional Convergence in the Enlarged EU Area

Ville Kaitila — Thu, 07 Oct 2004 11:00:00 +0000

Publication year: 2004
Pages: 17
Price: 10€
Language: English
Discussion Papers no. 935

Foreign Ownership in Finland – Boosting Firm Performance and Changing Corporate Governance

admin — Wed, 17 Mar 2004 11:00:00 +0000

Publication year: 2004
Pages: 38
Price: 10€
Language: English
Discussion Papers no. 904