Essays on the Technology Frontier and Finnish Innovation Policy

Research output: ThesisDoctoral ThesisCollection of Articles


  • Pii Elina Berghäll

Research units


This dissertation consists of five essays on the technology frontier, innovation policy and the Finnish information and communications technology (ICT) industry. Together they examine Finland's claimed structural shift to an innovation economy at the world technology frontier. A widely entertained hypothesis asserts that as countries catch up with the global technology frontier they need to shift from investment to innovation-based growth models. While the first essay finds that innovation indeed raises efficiency in advanced economies, the second essay does not find it significant in Finland. The relatively more significant roles played in catch-up of e.g., absorption capacities (education) and new ICT technologies may be due to the fact that Finnish industries are found to lag far behind the frontier. The third essay finds that even in the leading high-tech industry, R&D productivity impacts, whether measured by efficiency impacts of R&D intensity, technical change or the R&D elasticity of output are rather weak, in contrast to labour elasticity, firm size and scale elasticity. The fourth essay focuses on national innovation policy in a comparison of the determinants of R&D cooperation between innovating firms and universities and public knowledge institutes in Finland and the Netherlands and the generation of spillovers. The results find Finnish firms more willing to share proprietary knowledge with public R&D institutes, while the incoming spillovers from Finnish R&D institutes were the major motive for foreign-owned firms to cooperate with such institutes. Finnish innovation policy appears more able to integrate foreign-owned firms into the national innovation system, but whether it also helped foreign-owned firms to source superior Finnish technology, is another matter. The fifth essay shows that during 1993 – 2002 Finnish firms to have been if anything more efficient than foreign-owned entrants. Hence knowledge spillovers may have run predominantly from Finnish to technology-seeking foreign-owned firms. Despite the strong link between foreign direct investment and the world technology frontier (WTF) in the theoretical and empirical literature, the essay finds that foreign firms' efficiency does not provide a universally applicable proxy of the WTF. The analyses were carried out with various relevant methodologies on firm level panel data from Statistics Finland and the Community Innovation Survey (CIS), as well as harmonized industry level data obtained from the EU KLEMS database.


Original languageEnglish
QualificationDoctor's degree
Awarding Institution
  • Aalto University
Print ISBNs978-952-60-6425-3
Electronic ISBNs978-952-60-6426-0
Publication statusPublished - 2015
MoE publication typeG5 Doctoral dissertation (article)

    Research areas

  • efficiency, technology frontier, high-tech, R&D, innovation policy, FDI, collaboration, ICT, spillovers

ID: 18236453