Etla » productivity

How foreign companies in Finland differ from Finnish-owned enterprises? (In Finnish with English abstract)

Ville Kaitila — Thu, 11 Oct 2012 08:27:08 +0000

We analyse foreign-owned companies operating in Finland and compare them with domestic non-multinational firms while controlling separately for domestic multinational firms. The statistical and micro-econometric analysis is done using Statistics Finland data that contain all firms with at least ten employees in 1998–2008, partly in 1995–2010. We also control for a number of exogenous factors. According to the results, foreign-owned firms have higher productivity than domestic non-multinational firms. There is no difference in the average growth rate of productivity if the difference in levels is not controlled. Accordingly, a shift to foreign ownership has, on average, not affected the growth rate of productivity. The results concerning the growth rate of employment depend upon the method and timespan used in the analysis. The personnel of foreign-owned firms have a longer and higher education than the personnel of domestic non-multinational firms. Foreign-owned firms pay more direct taxes in relation to the number of their employees, which is partly due to these firms’ higher productivity. The probability of becoming a target of a foreign acquisition is higher for medium-sized and large Finnish firms with high productivity than other firms.

JEL: C23, F23, G34, J24
Publishing year: 2012
Pages: 62
Price: 10 €
Language: Finnish
Discussion Papers no. 1279

Innovaatiotoiminta – Suomi globaalitaloudessa. Loppuraportti

admin — Mon, 09 Jan 2012 11:00:00 +0000

This study analyses those country characteristics, which lead those regions to become as productive operation and innovation environments for firms and research centres. This study shows that those countries who invest wisely to develop their innovation environment will be successful in high technology export markets. In recent years, Finnish high technology exports have declined because of difficulties in telecommunication sector. Productivity analysis shows that high country-level R&D expenditures as in Finland and the United States – have positive correlation with labour productivity in manufacturing. Moreover, labour productivity in manufacturing in OECD countries relates positively with FDI and R&D expenditure growth. Also the level of education and firm-level sophistication increase labour productivity. Chinas role as global production factory and exporter has increased during 2000s. For example, Japanese and the US companies are leading actors, which are offshored their operations to China. However, deepening European integration has liberated and expanded intra-EU27 trade.

JEL: F12, F15, F23, F43, J24, L23, O31, O38
Publication year: 2012
Pages: 54
Price: 10€
Language: Finnish
Discussion Papers no. 1263

Innovaatiotoiminta – Näkemyksiä hyvinvointialaan ja työelämän kehittämiseen

admin — Wed, 31 Aug 2011 11:00:00 +0000

This study examines structures and challenges in the Finnish well-being sector from the innovation activity perspective. Firstly, it compares the quality and productivity based on international statistics and research reports, and R&D&I activities in the well-being sector. It investigates also shortly co-operation and interplay between public and private actors,a nd the role of ICT for improving sectors productivity. In the end, the study explores well-being and quality of labour markets, and innovation activities in Finland.

Publication year: 2011
Pages: 38
Price: 10€
Language: Finnish
Discussion Papers no. 1256

Kilpailukyky ja globaalin toimintaympäristön muutos – Suomen koneteollisuus maailmantaloudessa

Paavo Suni — Fri, 19 Aug 2011 11:00:00 +0000

The report analyses the impacts of globalization on competitiveness of national economies, industries and firms. The focus is in mechanical and electrical engineering and machinery. Global division of labor has significantly changed over the past few decades when the large emerging economies notably China have increased their role in worlds industrial production. Prices of industrial goods relative to GDP prices of developed countries have been falling thereby pressing the price competitiveness of industrial-country- firms who have been looking for new competitive edge on the global market. This includes offshoring and outsourcing and moving to service provision. The Finnish mechanical and engineering industry has adapted to changing global competitive environment through major structural changes the firm and plant structures have changed as consequence of exits and major reallocation of resources from less productive to higher productive units.

JEL: F13, L60, l64, O12
Publication year: 2011
Pages: 44
Price: 10€
Language: Finnish
Discussion Papers no. 1255

Firm Lifecycles and External Restructuring

admin — Mon, 27 Jun 2011 11:00:00 +0000

This paper studies how firms contribute to the productivity growth of an industry over their lifecycle. We present a decomposition method that allows us to condition the components of productivity growth on the age of production units. We find evidence for a prolonged positive exit effect that mirrors market selection during the early stages of firms lifecycle. This effect is tightly related to the negative initial productivity effect of entry. We also find some evidence that productivity-enhancing reallocation of resources between firms is concentrated on the middle aged firms.

JEL: O12, O14, O47
Publication year: 2011
Pages: 42
Price: 10€
Language: English
Discussion Papers no. 1253

Suhdanne- ja rakennekriisi yhtä aikaa? Toimiala- ja yritysrakenteen muutokset taantumassa

Mika Maliranta — Mon, 21 Feb 2011 11:00:00 +0000

The study shows that the exceptional drop in volume of Finlands GDP in 2009 as much as 8 per cent was to a large extent due to huge decline in exports and production of one industry, ICT. The contribution of ICT (or electronics and electro-technical industry) to GDP decline was close to two percentage points. The reduction of the industrys value added resulted, again, from the dramatic deterioration of profits (capital income). Nokia is by far the biggest player in the industry (more than half of the value added), and the decline of profits is mainly due to Nokia. Since 80-90 per cent of Nokias shares is owned by foreigners, the consequences of profit and value added decline are felt mainly outside Finland. Similarly, when the values added and profits grew in the early 2000s, the contribution to GDP growth was overestimated. The reason is that national accounting does not take into account the ownership structure of accumulated retained profits. However, as a result of the crisis the Finnish economy has experienced a permanent decline in its potential production.

JEL: F23, F43, L 63, O47
Publication year: 2011
Pages: 24
Price: 10€
Language: Finnish
Discussion Papers no. 1239

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

Essays on the Impacts of Technology Development and R&D Subsidies

Jyrki Ali-Yrkkö — Fri, 25 Apr 2008 11:00:00 +0000

This thesis studies the impacts of technology development and R&D subsidies. The first essay examines whether public and private R&D funding are substitutes or complements. Particular attention is paid to capital market imperfections by examining what kind of effect financial constraint has on the relationship between public and private funded R&D. According to empirical analyses, public R&D funding does not crowd out privately financed R&D. Instead, the results suggest that receiving a positive decision regarding public R&D funding increases privately funded R&D. The second essay analyses how public R&D financing impacts the labour demand of companies. Empirical results suggest that public R&D financing increases both group-level and domestic R&D employment. However, public funding does not have a statistically significant effect on non-R&D employment. The third essay focuses on the productivity effects of R&D. The results of empirical analyses are two-fold. In the short run (in 1-2 years), no statistically significant productivity impact of R&D is found. However, R&D does have an economically and statistically significant impact when R&D efforts made 3-5 years earlier are taken into account. Hence, a window of almost 5 years is needed to capture the productivity impact of R&D. The fourth essay studies how patent quality impacts the likelihood of a merger or acquisition. To proxy the quality of patents, both forward and backward citations are used. Multinomial logit estimations show that owning patents correlates with becoming a target for a foreign company. The same does not apply to targets for domestic firms. However, the results also indicate that the quality of patents does not have a statistically significant impact on the likelihood of becoming target for a domestic or foreign company.

Publication year: 2008
Pages: 121
Price: 30€
Language: English
ETLA A 43

Durable Goods and ICT: The Drivers of Euro Area Productivity growth?

admin — Wed, 23 Apr 2008 11:00:00 +0000

The purpose of this paper is to estimate the effect of durable goods and ICT on Euro Area economic growth and productivity change; when expenditure on consumer durables is recorded as capital investment. The capitalization of consumer durables impacts both the levels and growth rates of the capital stock, productivity and GDP. Our growth accounting computations demonstrated that the capital services of durables contributed one-tenth of economic growth and one-eight of labour productivity growth in 1995-2004. ICTŽs impacts were larger, i.e., one-fifth of GVA growth and one-sixth of labour productivity growth.

JEL: E13, E21, E22, O11, O47, O52
Publication year: 2008
Pages: 18
Price: 10€
Language: English
Discussion Papers no. 1132

Työolot ja tuottavuus – työpaikkavirtojen nosteessa vai puristuksessa?

Mika Maliranta — Wed, 23 Apr 2008 11:00:00 +0000

Analyses in this paper do not support the idea that job and worker flows have become more intensive and have deteriorated working conditions in the Finnish business sector. The magnitude of flow has in fact been rather stable since 1997. However, job flows are at a quite high level, as some 10% of jobs are destroyed every year. On the other hand, an even larger number of new jobs are created every year, resulting in positive net job creation. At the industry level, we find no relationship between working conditions and job flows. Job flows require worker mobility. Worker flows are nevertheless more than 100% larger than what job flows would require. Job flows constitute a central element of the mechanism through which technological change and productivity growth takes place in an economy. Quite normally, some 30-50% of an industrys productivity growth is due to this particular mechanism. Disruptions to this mechanism would have considerable effects on productivity growth and thereby the improvement of living standards.

JEL: J23, J28, O12
Publication year: 2008
Pages: 37
Price: 10€
Language: English
Discussion Papers no. 1134