Nexus of Migration and Regional Economic Development: Evidence from Regions and Municipalities in Finland (Esitys Nordic Academy of Management Conferencessa, Vaasa Finland 22.-24. 2019)

Abstract

<p>Despite having the fourth lowest regional economic disparities among OECD countries, Finland's economic development has been largely contributed by the metropolitan Helsinki-centered growth, with the most regional disparities occurred in job indicator. This research examines whether the increasing immigration trends may change the landscape of the creation of new jobs disparities across the sub-national levels using the data of 19 regions and 311 municipalities during the period of 2013 to 2017. To do this, first we investigate the effects of foreign citizen shares upon the business establishment numbers, and secondly, we look at the migration effects upon total number of personnel and total turnover to see the magnitude of effects upon regional economic development. Employing spatial autoregressive (SAR) fixed-effects model, we found that foreign citizens contributed positively to the growth of nationwide enterprises, particularly in the number of manufacturing and constructions establishments which are the top sectors characterizing Finland's economy. However, further examination shows that enterprises in the migrant-concentrated regions tend to be associated with lower turnover. More regions should introduce policy measures towards the development of local capacity and the empowerment of local agents, including adopting policy actions aimed at fostering migrant entrepreneurship and attracting more foreign talents. </p>