Understanding Regional Productivity in a Nordic Welfare State: Does ICT Matter?

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The study is about the determination of regional productivity in Finland. Regional labour productivity is related to industrial structure, demographic factors and the variables that capture the reorganization of labour markets. The data covers 85 regions from 1989 to 1997. The estimation results show that ICT manufacturing yields an increase in labour productivity, but the positive impact of ICT manufacturing is tightly limited to its direct contribution. In contrast to the U. S. and European stylized features, there is no empirical evidence for the view that when the density of economic activity increases, the labour productivity of the Finnish regions rises.

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