Effects of the European Monetary Union on High-Technology Exports

AbstractOur study estimates the effects of the European Monetary Union (EMU) on high-technology (HT) export and assesses the potential knowledge spillovers of such trade. Irrespective of the importance of the HT trade channel, none of the previous studies in the literature focus on the effects of a common currency on HT trade. Increasing trade in the HT sector may lead to more efficient use of resources and help countries to move towards a knowledge-based economy. Moreover, it may lead to higher overall growth. After considering multilateral resistances, pair fixed effects and bias correction in the preferred (three-way bias-corrected) model, EMU membership becomes negative and statisticall…

Inter-industry job mobility in the knowledge economy in Finland

Purpose – The purpose of this paper is to investigate inter-industry labor mobility, paying special attention to workers who move into high-tech (HT) sectors or knowledge-intensive business services (KIBSs). This study inquires whether skilled workers are mobile and whether the characteristics of mobile workers support the effective transfer of knowledge across industries. Design/methodology/approach – Census data representing 7 percent of Finnish residents were used. The micro-econometric estimation method with correction of sample selection bias was applied. Findings – The results show that young workers are the most mobile, whereas mobility decreased for those with previous work experie…

Innovation activity of SMEs in different locations

Todtling and Trippl (2005) argue that innovation activity is a key element in regional economic development (see also Ronde and Hussler, 2005; Audretsch and Lehmann, 2005; Cooke, 2005). However, we know little about the formation, development and diffusion of innovations in different milieux. The aim of this study is to clarify the factors – in particular, the regional factors – that affect the innovation activity of small and medium-sized enterprises (SMEs). Our analyses of the innovation activity of Finnish SMEs revealed that innovation activity is very brisk in towns and relatively brisk in rural areas, although the difference between the two was not statistically significant. A logistic…

The Regionalization of National Input–Output Tables: A Review of the Performance of Two Key Non-survey Methods

This chapter reviews the available empirical evidence on the performance of Flegg’s location quotient (FLQ) and Kronenberg’s Cross-Hauling Adjusted Regionalization Method (CHARM), a relatively new non-survey technique that accounts explicitly for cross-hauling when constructing regional input–output tables. The performance of the FLQ and related formulae is evaluated using official data for 20 Finnish and 16 South Korean regions. The results confirm previous findings that the FLQ can produce far more accurate estimates of regional output multipliers than can simpler LQ-based formulae such as the SLQ and CILQ. We also explore possible ways of determining suitable values for the unknown param…

CHARM-menetelmä panos-tuotostaulukoiden alueellistamisessa

The regionalization of national input-output tables : A study of South Korean regions

This paper uses survey‐based data for 16 South Korean regions to refine the application of Flegg's location quotient (FLQ) and its variant, the sector‐specific FLQ (SFLQ). These regions vary markedly in terms of size. Especial attention is paid to the problem of choosing appropriate values for the unknown parameter δ in these formulae. Alternative approaches to this problem are evaluated and tested. Our paper adds to earlier research that aims to find a cost‐effective way of adapting national coefficients, so as to produce a satisfactory initial set of regional input coefficients for regions where survey‐based data are unavailable. Este documento utiliza datos basados en encuestas de 16 reg…

Current Accounts and Coordination of Wage Bargaining

This study provides novel evidence on the impact of labor market institutions on current account dynamics. Our results suggest that a high degree of coordination of wage bargaining has a positive effect on the current account balance over the long run. This result is not driven entirely by wage moderation induced by centralized wage setting. We also provide robust evidence that a high degree of coordination of wage bargaining is associated with a slower current account adjustment toward its long-run equilibrium. This result seems theoretically plausible; the aggregate shocks in the exporting sector are largely driven by idiosyncratic shocks and the presence of idiosyncratic shocks increases…

A new approach to modelling the input-output structure of regional economies using non-survey methods

AbstractThis paper proposes a new approach to the regionalization of national input–output tables where suitable regional data are scarce and analysts are considering using location quotients (LQs). We focus on the FLQ formula, which frequently yields the best results of the pure LQ-based methods, and develop an enhanced way of implementing this approach. We use a modified cross-entropy (MCE) method, along with a regression model, to estimate values of the unknown parameter δ in the FLQ formula, specific to both region and country. An analysis of survey-based data for 16 South Korean regions reveals that the proposed FLQ+ approach yields more accurate estimates of both input coefficients an…

Coordination of Wage Bargaining, Exchange Rate Stability and External Adjustment

The literature on the determinants of the rate of current account reversion has been limited to examining the role of exchange rate regimes. We propose that the degree of coordination of wage bargaining affects the speed of current account adjustment. Our point estimates are economically and statistically significant, suggesting that fragmented firm-level wage bargaining facilitates external adjustment. We also find a strong negative interaction between the effects of coordination of wage bargaining and exchange rate stability on the rate of current account reversion.

Testing and implementing a new approach to estimating interregional output multipliers using input-output data for South Korean regions

Flegg's location quotient (FLQ) is a useful tool for estimating intraregional output multipliers. This paper uses it as one component when estimating interregional multipliers. Using statistical information criteria and official data for 16 South Korean regions, it is found that the best approach is to combine the FLQ with a simple trade model. The paper explains how the proposed procedure can be implemented for both multiple and individual regions, and also how a region-specific value for the unknown parameter δ in the FLQ formula can be determined. Finally, an illustrative case study of one of the regions is carried out.

Economic Impacts of Cultural Events on Local Economies: An Input—Output Analysis of the Kaustinen Folk Music Festival

This paper examines the economic impacts of Finland's Kaustinen Folk Music Festival. The impacts are calculated on output, demand and wages, employment and on national and regional taxes. The results indicate, first, that the effects of the festival on output are about ₠1.7 million. Kaustinen can also be seen as a good investment for the local municipality, as regional tax revenues increased by about ₠65,600 in the year studied, while the annual subsidy was ₠40,365. From the perspective of the Keski-Pohjanmaa region as a whole, the Kaustinen Folk Music Festival has a substantial impact on regional incomes through subsidies (about one-fifth of the costs of the festival is offset by subsidie…

Aluetaloustieteen menetelmät liikennejärjestelmän kehittämisen vaikutustarkastelussa

Tässä selvityksessä on arvioitu, voidaanko aluetaloudellisilla tarkasteluilla selvittää liikenneinfrastruktuurien kehittämiseen sekä liikenteen hinnoitteluun ja sääntelyyn liittyvien toimenpiteiden vaikutuksia yrityksille, kuluttajille ja julkiseen talouteen aluetalouksien tasolla. Tulosten mukaan se voidaan tehdä aluetalousmalleilla, joilla kuvataan ja lasketaan kokonaisvaltaisesti talousjärjestelmässä toisistaan riippuvien vaikutusketjujen muutoksia. Liikennejärjestelmän muutosten suorista käyttäjähyödyistä ja -haitoista seuraa välillisesti laajempia taloudellisia vaikutuksia eri markkinoiden välisen vuorovaikutuksen dynamiikassa. Nämä vaikutukset toteutuvat kasautumiseen, työmarkkinoihin…

Economic value of a local museum

Abstract The aim of this paper is to determine the economic value of a local cultural history museum, namely, the Museum of Central Finland in Jyvaskyla. This study also seeks to clarify what factors affect the willingness-to-pay for the Museum. Data were gathered from a sample of Jyvaskyla residents aged 18 and over via a postal questionnaire in November and December 1997. The results indicate that in reality, Jyvaskyla residents contribute less in taxes to the Museum than they report that they are willing to pay. This indicates that at least the present amount of tax revenue can justifiably be directed to the Museum. Maintenance of the Museum can thus be legitimised on the basis of the pu…

Yrittäjyys ja kehittyvä toimintaympäristö

Innovations and Growth: Evidence from Finnish SMEs

The purpose of this study is to clarify the factors that affect the ability of small and medium-sized enterprises (SMEs) to create innovations that promote firm growth. Studies regarding the relationship between research intensity and growth have typically produced mixed results, revealing a modest or non-existent influence of innovations on sales growth. These studies have typically used patents as indicators of innovation. We directly asked firms whether their innovations had affected their growth, and we regressed the results over several variables, covering a wide range of dimensions related to (1) personal factors, (2) firm-related factors (including questions that reflect a firm’s in…

Estimating Regional Input Coefficients and Multipliers: The Use of FLQ is Not a Gamble

Flegg A. T. and Tohmo T. Estimating regional input coefficients and multipliers: the use of FLQ is not a gamble, Regional Studies. This paper re-examines the Finnish evidence presented by Lehtonen and Tykkylainen on the use of location quotients (LQs) in estimating regional input coefficients and multipliers. They argue that the choice of an LQ-based method is a gamble and that there is no single method that can be recommended for general use. It is contended here that this evidence is erroneous and that the FLQ (Flegg's location quotient) yields results far superior to those from competing formulae, so it should provide a satisfactory way of generating an initial set of input coefficients.…

THE ECONOMIC VALUE OF THE EXTERNALITIES ASSOCIATED WITH CULTURAL GOODS

This study examined the economic value of the externalities associated with cultural goods. The purpose of this study is to clarify the willingness to pay to maintain the Central Finland museum of the ones which had filled a 18 year of Jyväskylä inhabitants and of factors which affect a payment willingness. From dichotomous choice valuation (DC-method) data we have estimated the cumulative probability density function (cdf). From estimated cdf we can calculate welfare measures such as median of the estimated distribution of CV. The study found firstly that the surplus of the consumer is thus 1.17 MFIM measured on the basis of the median value. In the respondents' opinion the value of the C…

Regional economic structures in Finland : analyses of location and regional economic impact

This dissertation consists of nine empirical studies which seek to broaden understanding of Finnish regional economic structures. These studies are divided between two topics: 1) regional specialization and industrial concentration in Finland, and 2) regional economic impact analysis. The empirical studies are preceded by an introduction, in which the theoretical background, outline and the main results of the thesis are presented. The research on the first topic is guided by the new economic geography literature, from which answers are sought to the location and agglomeration questions addressed in this dissertation. Evidence is found of increasing post-recession specialization in Finland.…

Turvetuotannon aluetaloudellinen merkitys : turvetuotanto ja sen vaihtoehdot

Tässä selvityksessä tarkastellaan turpeen tuotannon aluetaloudellisia vaikutuksia ja alan taloudellista mer kitystä Keski-Suomen ja Etelä-Savon maakuntien keskeisillä tuotantoalueilla. Turpeen tuotantoa on Keski- Suomessa selvästi enemmän (noin kolminkertainen) kuin Etelä-Savossa ja samoin aluetaloudelliset vaiku tuksetkin ovat tästä syystä suuremmat. Keski-Suomessa turpeen tuotannon korvaaminen onkin vaikeam paa ja edellyttäisi enemmän kasvua muilla aloilla verrattuna Etelä-Savoon. Turpeen tuotannon nopea alasajo johtaisi kummassakin maakunnassa energiantuotannon uudistamiseen. Niinpä taloudelliselta kannalta merkittävimmäksi vaikutukseksi nousi kummassakin maakunnassa ener gian tuotantoon…

Equal access to the top? Measuring selection into finnish academia

In this article, we draw a parallel between equality of opportunity in educational transitions and equality of opportunity in academic careers. In both cases, many methodological problems can be ameliorated by the use of longitudinal rather than cross-sectional data. We illustrate this point by using Finnish full-population register data to follow the educational and academic careers of the 1964–1966 birth cohorts from birth to the present day. We show how the Finnish professoriate is highly selected both in terms of parental background and in terms of gender. Individuals of different backgrounds differ greatly in the likelihood of completing different educational and academic transitions, …

Looking for determinants of willingness-to-pay for Sibelius Hall, Lahti

The aim of this paper is to determine the factors affecting the willingness-to-pay for a local concert hall, namely Sibelius Hall in Lahti. Our study argues that a high income, the use of cultural services and a positive attitude towards culture were connected to a high willingness-to-pay for Sibelius Hall. Our study revealed that “I do not know” answers can be partly explained by the character of cultural preferences being an acquired taste. As a consequence, the users and respondents exhibiting a positive attitude towards culture may choose the “I do not know” option instead of making a zero bid. peerReviewed

Liikenneinfrastruktuurihankkeiden rakentamisaikaiset vaikutukset työllisyyteen

Hankkeen tavoitteena on ollut määrittää tutkittuun tietoon perustuva viitekehys liikenneinfrastruktuurihankkeiden rakentamisaikaisten työllisyysvaikutusten arviointiin. Liikenneinfrastruktuurihankkeen rakentamisaikainen bruttomääräinen vaikutus työllisyyteen muodostuu suorasta työpanostarpeesta työmaalla ja välillisestä työpanostarpeesta. Välillinen työpanostarve taaksepäin syntyy rakentamisen välituotevalmistuksessa ja välillinen työpanostarve eteenpäin palkkatulojen synnyttämän kulutuskysynnän lisäyksen kautta. Nettotyöllisyysvaikutus tarkoittaa työllisyysasteen muutosta taloudessa. Silloin huomioidaan rakentamisesta johtuvan työvoiman kysynnän syrjäytysvaikutus jo olemassa oleviin työpai…

ENTREPRENEURIAL AND REGIONAL GROWTH ACTIVITY IN FINLAND

Audretsch & Feldman (2004) argue that an agglomeration is a collection of localized firms with a common focus. As firms thrive, resources are attracted to the region. They state that, if entrepreneurship serves as a mechanism for knowledge spillovers, measures of entrepreneurial activity should be linked positively to regional growth performance. In Schumpeterian economics the engine of economic development is entrepreneurial innovation. Creative destruction makes way for new innovations and growth. In this study, we simultaneously examine the regional entrepreneurial activity and regional growth activity in Finland. A further aim of the study was to find out if entrepreneurial activit…

Suomen ja Ahvenanmaan kalatalouden rakenneohjelmien 2000-2006 väliarvioinnin ajantasaistaminen

Kulttuuri ja aluetalous : vaikutukset ja käyttäjien kokema hyöty

New Developments in the Use of Location Quotients to Estimate Regional Input–Output Coefficients and Multipliers

Tohmo T. (2004) New developments in the use of location quotients to estimate regional input–output coefficients and multipliers, Reg. Studies 38, 43–54. This study compares the survey-based regional input–output coefficients and production multipliers published by Statistics Finland, 2000, with estimates obtained by applying location quotients (LQs) to national data. The consequences of using alternative adjustment formulae, the ‘SLQ, CILQ and FLQ’ are illustrated by an input–output model constructed for the Keski-Pohjanmaa (K-P) region. The results indicate that the SLQ and CILQ both produce highly misleading regional input–output coefficients and multipliers. These adjustment formulae ar…

Onko urbanisaatio maaseudun turma? : kaupunkien väestönkasvun vaikutukset erityyppisen maaseudun väestökehitykseen Suomessa ajanjaksolla 1990-2015

Kaupungistuminen on edennyt nopeasti Suomessakin, ja samalla maaseutu on menettänyt väestöään ja aktiviteettejaan. Miten urbanisaation eteneminen on vaikuttanut maaseudun kehitykseen? Artikkelin mukaan urbanisaatio levittää kaupunkien ympäristöön sekä ”varjoa” että ”valoa”, mutta ydinmaaseudun ja harvaan asutun maaseudun negatiiviseen kehitykseen se ei ole vaikuttanut. peerReviewed

Regional Input–Output Tables and the FLQ Formula: A Case Study of Finland

Flegg A. T. and Tohmo T. Regional input – output tables and the FLQ formula: a case study of Finland, Regional Studies. This paper examines the use of location quotients (LQs) in constructing regional input – output tables. Its focus is on the modified FLQ formula proposed by Flegg and Webber in 1997. Using data for twenty Finnish regions of widely different size, a regression model is developed to assist in the selection of a value for the unknown parameter δ in this formula. It is found that the FLQ yields results far superior to those from standard LQ-based formulae. The FLQ-based initial set of regional input coefficients could be used to build the non-survey foundations of a hybrid mod…

Elinkeinokalatalouden mosaiikki

Approaches to Learning, Wellbeing, Study Success and Employment Expectations in a Finnish Business School

In business school contexts, the relationships between the learning approach, wellbeing, study success, and employment expectations have not been widely studied. In this paper, we analyze learning approaches and student wellbeing in a Finnish business school. We found a significant relation between them and success in business school studies and employment expectations. Major-subject related differences in approaches to learning were observed. For example, social relations were particularly emphasized by students of marketing. More specifically, we found seven learning approaches: 1) Independent learners, 2) Teacher-centered learners, 3) Social learners, 4) Fumbling learners, 5) Theoretical…

Correction to: A new approach to modelling the input–output structure of regional economies using non‑survey methods

The Creative Class Revisited: Does the Creative Class Affect the Birth Rate of High-tech Firms in Nordic Countries?

In the new knowledge-based economy, the ability of both firms and regions to adapt to the changes in their external environment and to remain competitive is closely related to their capacity to innovate and continuously renew the existing structures and knowledge bases. With respect to this, dense concentrations of knowledge-intensive industries and related activities are usually considered to be propitious environments from which new innovations can emerge. In such environments, the ability to attract talented, highly skilled labor is crucial for the success of regions. Employees who possess and provide know-how and creativity play a leading role in knowledge-intensive production and inno…

Innovation among SMEs in Finland: The impact of stakeholder engagement and firm-level characteristics

PURPOSE: The aim of the paper is to analyse the importance of both internal capabilities (resources) and external information sources in implementing product, process, marketing and organizational innovations aiming to maximize firm competitive advantage and create value for stakeholders. Furthermore, in particular, we examine the role of public organizations, business networks, firm size, and the industry sector, in the emergence of different types of product, process, marketing, and organizational innovations. The research was based on the typology of innovation (product, process, marketing, and organizational) adopted by the OECD. METHODOLOGY: The paper is based on data from 389 SMEs loc…

Using CHARM to Adjust for Cross-hauling: The Case of the Province of Hubei, China

Data for the Chinese province of Hubei are used to assess the performance of Kronenberg's Cross-Hauling Adjusted Regionalization Method (CHARM), a method that takes explicit account of cross-hauling when constructing regional input–output tables. A key determinant of cross-hauling is held to be the heterogeneity of commodities, which is estimated using national data. However, contrary to the authors’ findings for Finland, CHARM does not generate reliable estimates of Hubei's sectoral exports, imports and volume of trade, although it is more successful in estimating sectoral supply multipliers. The poor simulations of regional trade are attributed to the fact that Hubei is a relatively small…

"A Comment on Tobias Kronenberg's "Construction of Regional Input-Output Tables Using Nonsurvey Methods: The Role of Cross-Hauling"

This article examines the effectiveness of a new non-survey regionalization method: Kronenberg’s Cross-Hauling Adjusted Regionalization Method (CHARM). This aims to take into account the fact that regions typically both import and export most commodities. Data for Uusimaa, Finland’s largest region, are employed to carry out a detailed empirical test of CHARM. This test gives very encouraging results. CHARM is suitable for studying environmental questions, but it can only be applied in situations where foreign imports have been included in the national input–output table. Where the focus is on regional output and employment, location quotients (LQs) can be used for purposes of regionalizati…