Bericht

Renewal of companies: Industry switching as a form of structural change

The contributions of entry and exit of firms to aggregate productivity growth are well-established in the literature. However, the impact of industry switching of firms on productivity remains overlooked. The purpose of this report is to shed new light on the role of industry switching as a form of structural change. The results show that industry switching is very common and occurs in all industries in Finland, especially during the times of recession. Industry switching has had both positive and negative contributions to aggregate productivity in different periods. Intra-industry switching had mainly negative impact on productivity growth suggesting that switching was taken as a strategy to survive. On the other hand, inter-industry switching had mainly positive impact on productivity growth, suggesting that switching was associated with new products and technologies. The study also looked at the structural developments of industries relevant for combating climate change. As emission reduction targets require companies to renew their product and service offerings, climate policy can help guide companies to switch industries. However, in the industries examined in the study, restructuring has so far taken place mainly through entry and exit.

Language
Englisch

Bibliographic citation
Series: ETLA Report ; No. 126

Classification
Wirtschaft
Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
Firm Behavior: Empirical Analysis
Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
Subject
Industrial structure
Industry switching
Labor productivity
Productivity decompositions

Event
Geistige Schöpfung
(who)
Kuosmanen, Natalia
Kuosmanen, Timo
Ali-Yrkkö, Jyrki
Pajarinen, Mika
Event
Veröffentlichung
(who)
The Research Institute of the Finnish Economy (ETLA)
(where)
Helsinki
(when)
2022

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Bericht

Associated

  • Kuosmanen, Natalia
  • Kuosmanen, Timo
  • Ali-Yrkkö, Jyrki
  • Pajarinen, Mika
  • The Research Institute of the Finnish Economy (ETLA)

Time of origin

  • 2022

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