Finnish Trade Sector Shows Recent Productivity Gains – Future Success Hinges on Intangible Investments

Petri Rouvinen, Mika Pajarinen and Jyrki Ali-Yrkkö

No 152, ETLA Brief from The Research Institute of the Finnish Economy

Abstract: Abstract We analyze value added, productivity, and tangible and intangible investments in the retail and wholesale trade sectors (hereafter, ”trade”) in four countries: Finland, Sweden, Germany, and the United States. Trade’s value added in Finland is relatively similar to that in Sweden. Labor productivity in the Finnish sector is higher than in Germany, but lower than in Sweden and the United States. Over the past five years, trade has been a bright spot in Finland’s productivity growth. Furthermore, the sector’s tangible and intangible investments show encouraging signs. We make two striking observations. First, as compared to its Finnish counterparts, the Swedish trade sector has invested significantly more in data and software as well as in innovative activity. Second, in Finland, over half of trade’s productivity growth stems from improved organization within and between firms, i.e., from total factor productivity. These observations suggest that while Finnish trade has reacted to major external changes, such as the rise of e-commerce, it has been more passive than its Swedish counterpart in capitalizing on emerging opportunities. In our view, Finland’s innovation policy needs to broaden its interpretation of intangible investments beyond R&D and to become more sector-agnostic. These changes would also support the future development of trade.

Keywords: Retail trade; Wholesale trade; Productivity; Intangible capital; Investments (search for similar items in EconPapers)
JEL-codes: D24 E22 L81 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2025-02-19
New Economics Papers: this item is included in nep-eff
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.etla.fi/wp-content/uploads/ETLA-Muistio-Brief-152.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rif:briefs:152

Ordering information: This working paper can be ordered from
https://www.etla.fi/ ... sta-investoinneista/
orders@etla.fi

Access Statistics for this paper

More papers in ETLA Brief from The Research Institute of the Finnish Economy Contact information at EDIRC.
Bibliographic data for series maintained by Kaija Hyvönen-Rajecki (info@etla.fi).