An article by Etla researcher Natalia Kuosmanen develops a new productivity assessment method that provides a more accurate picture of the productivity effects of structural change. The article was published in September in the academic journal Structural Change and Economic Dynamics. The developed method is applied to the industrial and service sector in a research project currently underway at Etla.
The research “Structural Change Decomposition of Productivity Without Share Weights” by Natalia Kuosmanen and Professor Timo Kuosmanen of Aalto University has been published in the academic journal Structural Change and Economic Dynamics. The published article breaks down industry productivity into components that provide a more accurate picture of the productivity effects of structural change. The new method also makes it possible to measure the impacts of firms’ industry switching on productivity growth in the industry.
– Industry switch by firms is surprisingly common, but its impact on productivity growth has not been studied before. Our article applies the developed method to the Finnish agricultural sector, which has undergone a major structural change in recent decades, says Etla researcher Natalia Kuosmanen.
Further use of the method is already underway. In the ongoing Etla research project funded by TT-Säätiö “How does the renewal of products and services affect firms’ productivity?” the method is utilized in the industrial and service sectors.
The research project studies in which sectors the renewal of products and services is particularly taking place and how this type of renewal has contributed to the growth of productivity in these sectors. In addition, the project also examines how reducing greenhouse gas emissions in industries has affected renewal of products and services. The research project will last until 2022.
Structural Change and Economic Dynamics is an academic journal that discusses structural change in the economy from a variety of perspectives. A special emphasis is on articles dealing with econometric and statistical techniques suitable for studying structural change.