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Productivity convergence across industries and regions in Norway and Sweden

Listed author(s):
  • Östbye, Stein


    (Department of Economics, University of Tromso, N-9037 Tromso, Norway)

  • Westerlund, Olle


    (Department of Economics, Umeå University)

Several authors have asked why the differences in output per worker between countries are so large and hypothesized that differences in social infrastructure provide an answer. However, differences in output per worker also vary considerably when comparing spatial units at lower levels of resolution, without substantial variation in the social infrastructure. The purpose of this paper is to discuss possible reasons for regional differences based on data for the Scandinavian Peninsula at a spatial resolution almost equivalent to the European NUTS3. Since Norway and Sweden are considered to be particularly egalitarian and homogeneous societies, differences in broad measures of social infrastructure can hardly be invoked as substantially important determinants of productive performance. Instead, we investigate the role played by industrial structure. We find strong productivity convergence between Norwegian regions and weak divergence between Swedish ones. For Norway, there is convergence in primary production, manufacturing and services. For Sweden, there is divergence, except in the primary sector. The effect of the industry structure on the spatial distribution of productivity appears to be small in magnitude, but is qualitatively important at least for one time period. The data cover 5-year intervals from 1980 to 2000 for Norway and from 1985 to 2000 for Sweden.

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Paper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 632.

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Length: 48 pages
Date of creation: 02 Apr 2004
Handle: RePEc:hhs:umnees:0632
Contact details of provider: Postal:
Department of Economics, Umeå University, S-901 87 Umeå, Sweden

Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
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  1. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
  2. Stein Ostbye & Olle Westerlund, 2003. "Comparing home-grown fruits: productivity convergence across industries and regions," ERSA conference papers ersa03p483, European Regional Science Association.
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