Staying Competitive

The project will be a comparative analysis of the development of labour productivity, wages and operating margins in Norway, Sweden, Denmark and Finland. The analyses will be based on comparative micro-level data, with a special focus on dynamics and dispersion.

While these countries are quite similar along certain dimensions, they are quite dissimilar along others. The great recession appears to have hit these countries differently. The role of wage formation, reallocation and creative destruction for international competitiveness will be compared between the Nordic countries. We are particularly concerned with comparing the mechanisms underlying the development of labour costs and labour productivity. Comparisons will build on the work in Böckerman and Maliranta (2012).

Furthermore, we will compare the distribution of productivity within industries across the Nordic countries, as a measure of competitive pressure. We aim at comparing across the Nordic countries, but also to make comparisons to existing literature for the US and other European countries.

Uncovering comparative measures of the micro relations that adds up to the macro relationships that we know, is crucial also for the understanding of the underlying mechanisms that drive competitiveness in our small open economies. Since the Nordic countries actually have quite different industry structure, comparisons will be made within industry, and aggregate comparisons with appropriate adjustments for industry structure.

Within the existing project, we compare the development of labour costs, labour productivity and output prices between the countries, broadly using the STAN data base (OECD) and in detail using micro data each country. Adding this project to the collaboration will enable us to develop this work into internationally publishable research. Theoretical development and comparisons with economies outside of the Nordic countries as well will be done in collaboration with Kalle Moene at ESOP (Centre for the Study of Equality, Social Organization, and Performance).

The project is coordinated by Erling Barth, ISF. Other participants from outside Etla are Karsten Albæk, SFI, and Fredrik Heyman, NFI.

Starting year: 2014
Year of completion: 2018
Person in charge: Maliranta, Mika
Funding: Norwegian Research Council