The Micro-level Dynamics of Regional Productivity Growth: The Source of Divergence in Finland Revised

Despite a rapidly expanding theoretical and empirical literature emphasising the role of incessant intra-industry restructuring in productivity growth, few studies have gone beyond the framework of the representative firm in examining convergence or divergence in regional productivity. We use unique longitudinal plant-level data over a long period of time and apply a useful variant of productivity decomposition methods to study differences in productivity-enhancing restructuring within manufacturing industries among Finnish regions. Long-lasting differences in industry productivity growth between Southern and Eastern Finland can be attributed to the “creative destruction” components of productivity growth, mainly to the between and entry components.

Alueiden tuottavuuskasvun mikrotason dynamiikka : Divergenssin lähde Suomessa tarkistettuna

JEL: O12, R23
Date: 2006
Pages: 38
Price: 10 €
Language: English
Discussion Papers no. 1038