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The Micro-level Dynamics of Regional Productivity Growth: The Source of Divergence in Finland

  • Böckerman, Petri
  • Maliranta, Mika

Productivity growth of the Finnish regions in 13 manufacturing industries is decomposed into micro-level sources by using plant-level data from 1975 to 1999. There are substantial regional differences in the intensity of productivity-enhancing restructuring. Dynamic competition is more intensive in Southern Finland, where the productivity level is also high. In contrast, plants located in Eastern Finland are equipped with low-productivity technologies owing to persistently sluggish micro-level dynamics. Productivity dispersion between plants within industries is greatest in Southern Finland. We argue that intensive experimentation is a more reasonable interpretation of this finding than large static X-inefficiency in this high productivity region.

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Paper provided by The Research Institute of the Finnish Economy in its series Discussion Papers with number 854.

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Length: 30 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:rif:dpaper:854
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