Does Sweden export its TFP?
That we tell you about:
•Gross Production TFP for 50 different industries and a
handful aggregates
•The impact of R&D, ICT intensity and labour quality on
the TFP
•New Gross Production TFP that includes intermediates
•The relationship between the TFP and prices
•The export of TFP
•The import of TFP
Average TFP on industry level
1994 - 2005
TFP for the Total Business Sector
1994-2005
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
TFP for the Goods and the Service
Sector 1994-2005
16.0
14.0
Goods
12.0
Services
10.0
Poly. (Goods)
8.0
Poly. (Services)
6.0
4.0
2.0
05
20
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
95
96
19
-4.0
19
19
-2.0
94
0.0
Average TFP 1994-2003 and ICT
Intensity 2003
TFP-growth in per cent
15
10
y = 0.0569x - 0.1301
R2 = 0.1047
5
0
0
20
40
60
-5
-10
ICT-intensity
80
100
Average TFP 1994-2005
Industries according to ICT intensity
25.0
20.0
15.0
10.0
High
Medium
Low
5.0
0.0
-5.0
-10.0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
A tentative explanation of the TFP growth
•The service industries have 1 percent lower TFP growth per
year given the other variables
•The coefficient for R&D intensity indicates that an increase of
10 percent of the value added gives an increase in TFP growth
rate by more than 0.4 percent per year
•An increase of 10 percent of the proportion of ICT capital in
relation to the value added gives almost the same effect or 0.4
•The effect of labour quality is negative; this could at least in
part be explained by difficulties in rationalisation and problems
with price indices for some service industries with very
qualified staff. This underlines by the fact that for the
manufacturing industries the correlation is positive
Who benefit most from TFP growth?
•Who benefits most depends on the competitive environment in
each industry
•Extreme examples are many in the ICT industry, but the
pharmaceutical industry are better protected by their patents
•The Swedish food industry is an example of how much a change
in the competitive situation means
A country profits from globalisation by importing and exporting
TFP, but it is always better to buy cheap and sell at high prices
It is not only the TFP in the own production that matters but also
the TFP in the intermediates
The relationship between TFP
and price changes 1993-2003
10.0
8.0
6.0
Price devolpment
4.0
2.0
0.0
-10.0
-5.0
0.0
5.0
-2.0
-4.0
-6.0
y = -0.6751x + 2.3614
R2 = 0.4894
-8.0
-10.0
New Gross Production TFP
10.0
15.0
Main Industries in the Swedish
export of TFP 1995 and 2003
30 Office ma
61 Water transport
36 Furniture
Export 03
20 Wood
Export 95
50-52 Trade
27 Basic metals
29 Machinery
24Chemicals
34 Motor vehicles
32 Telecom
0
10
20
30
40
In percent of total export
50
60
Does Sweden export its TFP?
What we have told you:
•Gross Production TFP in Sweden is high, especially for
manufacturing industries
•The impact of R&D, ICT intensity on TFP is high but not for
labour quality
•New Gross Production TFP, that includes intermediates, do
influences the prices
•The export of TFP is dominated by Telecom and a handful
other engineering industries and chemicals
•The import of TFP is almost a mirror image, except for oil