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The direct contribution of foreign-owned companies (FOCs) to productivity-enhancing intra-industry restructuring in Finnish manufacturing is analyzed by means of a productivity decomposition method. It is found that the FOCs have had an increasing role on the micro-level productivity dynamics after the liberalization of the foreign-ownership legislation in 1993. However, when proportioned to the employment share, the change of their contribution seems less outstanding. Initially the restructuring component of the FOCs was disproportionally large but had normalized by the end of the 1990s. ; Tutkimuksessa selvitetään ulkomaalaissomisteisten yritysten suoraa vaikutusta tuottavuutta vahvistavaan, toimialojen sisällä tapahtuvaan toimipaikkarakenteiden muutokseen Suomen teollisuudessa. Kysymystä on tutkittu tuottavuuden hajontamenetelmää käyttäen. Havaitaan, että ulkomaalaisomisteisten yritysten merkitys tuottavuuden mikrotason dynamiikalle on lisääntynyt vuonna 1993 tapahtuneen ulkomaalaisomistuksen liberalisoinnin jälkeen. Toisaalta kun ulkomaalaissomisteisten yritysten kontribuutio suhteutetaan niiden työllisyysosuuteen, kontribuution muutoksen merkitys näyttää vähemmän esiinpistävältä. Alussa ulkomaalaisomisteisten yritysten merkitys oli suhteellisesti ottaen suuri, mutta tilanne tasaantui 1990-luvun jälkipuoliskolla.

We develop an augmented Olley–Pakes (OP) decomposition that allows us to examine how entering and exiting firms contribute to the popular OP covariance measure of allocative efficiency. Applying the decomposition to a comprehensive micro‐level data, we find that a large part of the OP covariance component can be attributed to entrants and exiting firms. We also build a model of firm dynamics that is consistent with our main empirical results. In the model economy, the standard OP covariance component tends to increase with certain type of distortions because of endogenous changes in firm entry and exit.

In contrast with the experiences of the UK and the US, the distribution of labour and capital income has changed sharply in favour of capital in most Continental European and Nordic countries during the past two decades. We examine forces behind the evolution of the aggregate labour share by analysing the dynamics of labour shares within and between firms/plants in the Finnish business sector. Using a decomposition method applied in labour economics and productivity analysis, we show that much of the decline in the aggregate labour share stems from the reallocation of resources between firms and plants, while labour shares at the firm/plant level have remained relatively stable.

AbstractWe examine how the gender of business owners is related to the wages paid to female relative to male employees working in their firms. Using Finnish register data and employing firm fixed effects, we find that the gender pay gap is—starting from a gender pay gap of 11 to 12%—two to three percentage points lower for hourly wages in female-owned firms than in male-owned firms. Results are robust to how the wage is measured, as well as to various further robustness checks. More importantly, we find substantial differences between industries. While, for instance, in the manufacturing sector, the gender of the owner plays no role in the gender pay gap, in several service sector industries, like ICT or business services, no or a negligible gender pay gap can be found, but only when firms are led by female business owners. Businesses with male ownership maintain a gender pay gap of around 10% also in the latter industries. With increasing firm size, the influence of the gender of the owner, however, fades. In large firms, it seems that others—firm managers—determine wages and no differences in the pay gap are observed between male- and female-owned firms.

The Nordic welfare model has received a lot of positive attention around the world. High standard of living, small income disparities and substantial social mobility looks like a very attractive package. Moreover, sound public finances and strong emphasis on environmental sustainability suggest that today's success has not been accomplished at the expense of future generations. But is there really a unique "Nordic Supermodel", unshaken by the global economic crisis and capable of producing continuous high growth and world class welfare services when many developed economies struggle with the impacts of global competition and population ageing? This book shows that Nordic performance has not been quite as unique or uniform as often claimed. The recent global and European crisis and country specific shocks have affected also the Nordic countries, some of them very strongly. And there are as many variants of the Nordic model as there are Nordic countries. Going forward, also the Nordic countries will be challenged by ageing, globalisation and technological change, some more than the others. On the other hand many fundamentals remain strong in the Nordic countries, and, what is perhaps most important, the Nordics have proved themselves capable of adjusting. Labour market practices, pension policies, and production of public services have been reformed to match new circumstances. Public policies have been aimed at creating new jobs and helping people in transition, not at protecting uncompetitive businesses. There is a strong, rational tradition of consensual policy making. Further reforms are needed, and some widening of income disparities may be inevitable. The message of the book is, however, that refocused and recalibrated in a realistic scale the Nordic model has good chances of thriving well into the future.