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

  • Mika Maliranta

    ()

  • Petri Rouvinen

    ()

  • Pekka Ylä-Anttila

    ()

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.

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Article provided by Centre for the Study of Living Standards in its journal International Productivity Monitor.

Volume (Year): 20 (2010)
Issue (Month): (Fall)
Pages: 68-84

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Handle: RePEc:sls:ipmsls:v:20:y:2010:4
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  1. 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.
  2. Pekka Ylä-Anttila & Christopher Palmberg, 2007. "Economic and Industrial Policy Transformations in Finland," Journal of Industry, Competition and Trade, Springer, vol. 7(3), pages 169-187, December.
  3. Anita Wölfl & Isabelle Wanner & Tomasz Koźluk & Giuseppe Nicoletti, 2009. "Ten Years of Product Market Reform in OECD Countries: Insights from a Revised PMR Indicator," OECD Economics Department Working Papers 695, OECD Publishing.
  4. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages F374-F403, 06.
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