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Increasing Regional Disparities in the 1990s: The Finnish Experience

Author

Listed:
  • Aki Kangasharju
  • Sari Pekkala

Abstract

Kangasharju A. and Pekkala S. (2004) Increasing regional disparities in the 1990s: the Finnish experience, Reg. Studies38, 255-267. This paper investigates why regional disparities in Finland started to grow in the early 1990s, after a decades-long period of convergence. The analysis focuses on per capita GDP and its subcomponents, particularly labour productivity, jobs and population. The results show, first, that the evolution of labour productivity and the number of jobs account for the regional divergence of per capita GDP. Second, even though interregional migration and fertility tend to have a convergent effect on regional per capita GDP, its effect was not strong enough; the divergence of productivity and jobs dominated. Third, among divergent factors (productivity and jobs), primary production contributed the most to the divergence of per capita GDP during the recession of the 1990s, and private services during the subsequent recovery. One reason for divergence of the primary production sector may have resulted from adjustment to the common agriculture policy of the EU, and that of private services can mainly be accounted for by increased economic competition and outsourcing of manufacturing. Kangasharju A. et Pekkala S. (2004) Des ecarts regionaux croissants dans les annees 1990: etude de cas finlandaise, Reg. Studies38, 255-267. Cet article cherche a examiner les raisons pour lesquelles les ecarts regionaux en Finlande ont commence a se creuser au debut des annees 1990, apres des decennies de convergence. L'analyse porte sur le PIB par tete et ses composantes, notamment la productivite du travail, l'emploi et la population. Les resultats laissent voir, en premier, que l'evolution de la productivite du travail et le nombre d'emplois expliquent les ecarts regionaux du PIB par tete. En deuxieme, bien que la migration interregionale et la fecondite aient tendance a faire converger le PIB par tete regional, l'effet n'est pas suffisamment marque: l'ecart entre la productivite et l'emploi domine. En troisieme, parmi les facteurs divergents (la productivite et l'emploi), la production primaire contribue le plus aux ecarts du PIB par tete pendant la recession des annees 1990, et les services prives pendant la reprise ulterieure. Un facteur qui explique l'ecart du secteur de production primaire resulte de l'ajustement a la politique agricole commune de l'Ue, et celui des services prives s'explique essentiellement par une augmentation de la concurrence economique et de l'approvisionnement exterieur de l'industrie. Kangasharju A. und Peccala S. (2004) Zunehmende regionale Ungleichheiten in den neunziger Jahren: Erfahrungen in Finnland, Reg. Studies38, 255-267. Dieser Aufsatz untersucht, warum regionale Ungleichheiten in Finnland nach einer Jahrzehnte lang anhaltenden Periode der Konvergenz zu Beginn der neunziger Jahre anfingen, zuzunehmen. Die Analyse konzentriert sich auf pro Kopf Bruttoinlandsproduktion und Teilkomponenten, insbesondere Arbeitsleistung, Arbeitsplatze und Bevolkerung. Die Ergebnisse zeigen erstens, dass die Entwicklung der Arbeitsleistung und die Anzahl der Arbeitsplatze die regionalen Abweichungen des pro Kopf Bruttoinlandsprodukts erklaren. Zweitens war trotz interregionaler Wanderung und Fruchtbarkeit, die oft zusammenfallen, und sich auf regionale pro Kopf Bruttoinlandsproduktion auswirken, diese Wirkung nicht stark genug: die Divergenz von Produktivitat und Arbeitsplatzen dominierte. Drittens trug wahrend des wirtschaftlichen Ruckgangs der neunziger Jahre unter den voneinander divergierenden Faktoren (Produktivitat und Arbeitsplatz) die primarproduktion am meisten zu der Divergenz der Bruttoinlandsprodukts bei, und private Firmen wahrend der darauf folgenden Erholung. Ein Grund fur das abweichende Verhalten des Primarproduktionssektors ergab sich aus der Anpassung an die gemeinsame Landwirtschaftspolitik der EU; die der Privatbetriebe lasst sich grossgtenteils durch zunehmenden wirtschaftlichen Wettbewerb und Produktionsverlagerung der herstellenden Industrie erklaren. Kangasharju A. y Pekkala S. (2004) El aumento de las disparidades regionales en los anos 90: la experiencia finlandesa, Reg. Studies38, 255-267. Este articulo investiga por que las disparidades regionales en Finlandia comenzaron a incrementarse a principios de los anos 90, despues de un largo periodo de decadas de convergencia. El analisis se concentra en el PIB per capita y sus subcomponentes, particularmente la productividad laboral, empleos y poblacion. Los resultados muestran, en primer lugar, que el desarrollo de la productividad laboral y del numero de empleos explican la divergencia regional en lo que respecta al PIB per capita. En segundo lugar, aunque la emigracion interregional y la fertilidad tienden a tener un efecto de convergencia del PIB per capita regional, su efecto no fue suficientemente marcado: domino la divergencia en la productividad y los empleos. En tercer lugar, entre los factores divergentes (productividad y empleos), la produccion primaria fue la que mas contribuyo a la divergencia en el PIB per capita durante la recesion de los anos 90, y los servicios privados durante la subsiguiente recuperacion. Una de las causas que explican la divergencia en el sector de produccion primario fue la resultante del ajuste a las politicas de agricultura comun de la UE, y la de los servicios privados se puede explicar principalmente por un incremento de la competicion economica y de las actividades de manufacturacion.

Suggested Citation

  • Aki Kangasharju & Sari Pekkala, 2004. "Increasing Regional Disparities in the 1990s: The Finnish Experience," Regional Studies, Taylor & Francis Journals, vol. 38(3), pages 255-267.
  • Handle: RePEc:taf:regstd:v:38:y:2004:i:3:p:255-267
    DOI: 10.1080/003434042000211097
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    Cited by:

    1. Irena Dokic & Ivana Rasic Bakaric & Zlatan Fröhlich, 2014. "Impact of crisis on regional development in Croatia," ERSA conference papers ersa14p455, European Regional Science Association.
    2. Andrés Rodríguez‐Pose & Ugo Fratesi, 2007. "Regional Business Cycles and the Emergence of Sheltered Economies in the Southern Periphery of Europe," Growth and Change, Wiley Blackwell, vol. 38(4), pages 621-648, December.
    3. Voutilainen Olli & Wuori Olli, 2012. "Rural development within the context of agricultural and socio-economic trends – the case of Finland," European Countryside, Sciendo, vol. 4(4), pages 283-302, January.
    4. Ottaviano, Gianmarco I.P. & Pinelli, Dino, 2006. "Market potential and productivity: Evidence from Finnish regions," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 636-657, September.
    5. Petri Böckerman & Mika Haapanen, 2013. "The effect of polytechnic reform on migration," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 593-617, April.
    6. Roberto Ezcurra, 2011. "Unemployment Volatility and Regional Specialization in the European Union," Regional Studies, Taylor & Francis Journals, vol. 45(8), pages 1121-1137.
    7. Hasan Engin Duran, 2015. "Regional Employment Volatility In Turkey: Causes And Consequences," Working Papers 2015/06, Turkish Economic Association.
    8. Mika Haapanen & Hannu Tervo, 2012. "Migration Of The Highly Educated: Evidence From Residence Spells Of University Graduates," Journal of Regional Science, Wiley Blackwell, vol. 52(4), pages 587-605, October.
    9. Lehtonen Olli & Tykkyläinen Markku & Voutilainen Olli, 2012. "Root causes of rural decline in economic well-being in Finland," European Countryside, Sciendo, vol. 4(3), pages 217-239, January.
    10. Halonen Maija & Vatanen Eero & Kotilainen Juha & Tykkyläinen Markku, 2015. "Industry life cycles of a resource town in Finland – the case of Lieksa," European Countryside, Sciendo, vol. 7(1), pages 16-41, March.
    11. Stefano Magrini & Margherita Gerolimetto & Hasan Engin Duran, 2011. "Distortions in Cross-Sectional Convergence Analysis when the Aggregate Business Cycle is Incomplete," Working Papers 2011_07, Department of Economics, University of Venice "Ca' Foscari".

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