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Eläkevaroilla vauhtia Suomen talouskasvuun?

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  • Hyytinen, Ari
  • Määttänen, Niku
  • Lassila, Jukka
  • Valkonen, Tarmo

Abstract

The earnings-related pension system is partially pre-funded in Finland and has currently large reserves. This has roused debate whether the pension funds should take a more active role in promoting employment, growth and domestic ownership of the firms. We analyse the justifications presented for and against overweighting domestic investments in the portfolios of the pension institutions. E.g., is it possible to invest the funds in a way that generates higher wage bill and more contribution revenue? Furthermore, have the pension funds incentives to promote such investments? Another important issue is whether there exists serious shortages in the domestic financial markets and whether the pension funds are the proper actors to fix these problems. Third raised issue is the role of the pension funds in the domestic infrastructure markets. Our overall conclusion is that excess weight in domestic firms is well justified only in cases in which the international investors misprice the firms, or for some other reasons keep the conditions of financing the firms unreasonable stringent. In these cases there is no conflict between promoting domestic investments and optimal combination of risk and yield. Disturbing the vital role of the financial markets in eliminating inviable projects would, however, weaken growth and employment.

Suggested Citation

  • Hyytinen, Ari & Määttänen, Niku & Lassila, Jukka & Valkonen, Tarmo, 2010. "Eläkevaroilla vauhtia Suomen talouskasvuun?," Discussion Papers 1224, The Research Institute of the Finnish Economy.
  • Handle: RePEc:rif:dpaper:1224
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    References listed on IDEAS

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    1. Charles Edquist & Terttu Luukkonen & Markku Sotarauta, 2009. "Broad-Based Innovation Policy," Chapters,in: The Evaluation of the Finnish National Innovation System, pages 11-70 The Research Institute of the Finnish Economy.
    2. Gordon Murray & Ari Hyytinen & Markku Maula, 2009. "Growth Entrepreneurship and Finance," Chapters,in: The Evaluation of the Finnish National Innovation System, pages 147-202 The Research Institute of the Finnish Economy.
    3. Avnimelech, Gil & Teubal, Morris, 2006. "Creating venture capital industries that co-evolve with high tech: Insights from an extended industry life cycle perspective of the Israeli experience," Research Policy, Elsevier, vol. 35(10), pages 1477-1498, December.
    4. Gil Avnimelech & Morris Teubal, 2008. "Evolutionary targeting," Journal of Evolutionary Economics, Springer, vol. 18(2), pages 151-166, April.
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    Cited by:

    1. Kulvik, Martti & Tähtinen, Marja & Ylä-Anttila, Pekka, 2013. "Business and Intellectual Capital Development in Financial Riptide - Case Studies of Finnish Biotechnology and Pharmaceutical Companies Dispersing into Global Value Chains," ETLA Reports 17, The Research Institute of the Finnish Economy.

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