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Finland’s Path to the Global Productivity Frontier through Creative Destruction

Author

Listed:
  • Mika Maliranta
  • Petri Rouvinen
  • Pekka Ylä-Anttila

Abstract

The marked acceleration of Finnish productivity growth since the mid-1980s is attributable to intensifying creative destruction, understood as the joint effect of market entry and exit as well as resource reallocation between continuing plants and firms. This acceleration coincided with the economy-wide deregulation, liberalization, and the opening up of Finland, which provided new incentives and opportunities, thus enabling individuals and businesses to capitalize on intangible capital accumulated via sustained investment since World War II. The “Nokia effect” was particularly important in the latter half of the 1990s, but productivity enhancing restructuring has been more widespread. Developments in Finland are contrasted to those in Japan, Sweden, and the United States.

Suggested Citation

  • Mika Maliranta & Petri Rouvinen & Pekka Ylä-Anttila, 2010. "Finland’s Path to the Global Productivity Frontier through Creative Destruction," International Productivity Monitor, Centre for the Study of Living Standards, vol. 20, pages 68-84, Fall.
    • Handle: RePEc:sls:ipmsls:v:20:y:2010:4
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    References listed on IDEAS

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    5. Bockerman, Petri & Maliranta, Mika, 2007. "The micro-level dynamics of regional productivity growth: The source of divergence in Finland," Regional Science and Urban Economics, Elsevier, vol. 37(2), pages 165-182, March.
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    8. Ark, Bart van, "undated". "International comparisons of output and productivity: manufacturing productivity performance of ten countries from 1950 to 1990," GGDC Research Memorandum No.1, Groningen Growth and Development Centre, University of Groningen.
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    Cited by:

    1. Petri Böckerman & Mika Maliranta, 2013. "Outsourcing, Occupational Restructuring, and Employee Well-Being: Is There a Silver Lining?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(4), pages 878-914, October.
    2. Marek Tiits & Tarmo Kalvet & Imre Mürk, 2015. "Smart Specialisation in Cohesion Economies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(2), pages 296-319, June.
    3. Someshwar Rao, 2011. "Insights from Latin America for Canada: A Review Article on The Age of Productivity: Transforming Economies from the Bottom Up," International Productivity Monitor, Centre for the Study of Living Standards, vol. 21, pages 70-81, Spring.
    4. Hyytinen, Ari & Maliranta, Mika, 2011. "Firm Lifecycles and External Restructuring," Discussion Papers 1253, The Research Institute of the Finnish Economy.

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    More about this item

    Keywords

    creative destruction; productivity; growth; public policy; Finland;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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