IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Not only Nokia: what Finland tells us about new economy growth

Listed author(s):
  • Francesco Daveri
  • Olmo Silva

type="main" xml:lang="en"> Is there a relation between information technologies and the growth rate of productivity? Is this relation mainly due to the efficiency-enhancing effects of few leading industries or rather to the pervasive spreading of IT throughout the economy? Our country study on Finland in the 1990s is a contribution to shed light on these issues. We find that Nokia, the world leader in cellular phone production, directly and substantially contributed to enhance productivity growth in Finland. Productivity growth gains outside Nokia and few other IT-related service industries have been small, temporary, or non-existent at all, though. We also provide two pieces of evidence against the existence of technological spillovers between Nokia and the other fast-growing industries in the Finnish economy. As shown by the Finnish input-output table, the thinness of the inter-industry linkages between the Nokia industry and the rest of the economy indicates that productivity gains of the size recorded in the few other fast-growing service industries can be associated to Nokia's productivity boom only to a very small extent. Parallel statistical analysis also shows a striking association between the timing and the industry distribution of productivity gains and the declining pace of the price of machinery and equipment investment goods in those industries. This is evidence that TFP growth increases in those industries should be mostly attributed to the decline in the world price of computing power. Altogether, we interpret our findings as showing that, even in a country endowed with a world-class national champion and a policy environment commonly thought of as conducive to growth, a ‘new economy’ takes a long time to show up. Unlike commonly held tenets, IT diffusion has shown a limited potential in speeding up this process in Finland.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by CEPR & CES & MSH in its journal Economic Policy.

Volume (Year): 19 (2004)
Issue (Month): 38 (April)
Pages: 117-163

in new window

Handle: RePEc:bla:ecpoli:v:19:y:2004:i:38:p:117-163
Contact details of provider: Postal:
3rd Floor, 77 Bastwick Street, London EC1V 3PZ

Phone: +44 (0)20 7183 8801
Fax: +44 (0)20 7183 8820
Web page:

More information through EDIRC


Schackstr. 4, 80539 Munich

Phone: +49 (89) 2180-2748
Fax: +49 (89) 39 73 03
Web page:

More information through EDIRC


48 boulevard Jourdan - 75014 Paris

Phone: 01 43 13 63 00
Fax: 01 43 13 63 10
Web page:

More information through EDIRC

Order Information: Web:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bla:ecpoli:v:19:y:2004:i:38:p:117-163. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)

or (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.