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Finnish food industry in 1989–2002: an output-oriented input–output analysis

Abstract Ten years in the EU (European Union) have passed and structural changes have taken place in the food sector, but it is a common opinion that as far as production is concerned the food sector has managed better than expected. In this paper, we study structural changes in the Finnish food industry in 1989–2002, with the focus on the use of domestic and imported inputs and value-added formation before and after joining the EU. An input-output (I-O) analysis output approach will be applied, as this enables to trace the multiplier effects of an industry's total output. The results confirm an increase in imported inputs as well as in demand of the domestic service industries; and conversely, a decrease in the food industry's (own) value added. It is concluded that outsourcing, labour reduction and increased imports have improved the efficiency of the Finnish food industry and contributed to its stable development after accession to the EU.