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The Swedish Paradox Arises In Fast-Growing Sectors

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Executive Summary

The aim of this paper is to examine whether the previously observed gap between growth of R&D and economic performance, known as the 'Swedish paradox', is a general phenomenon across all sectors of the economy, or only occurs in specific industry segments. The dataset used for the analysis covers nearly the entire Swedish economy 1985-1998, divided into five broad sectors: Fast-growing industries, Slow-growing industries, Industrial outphasers, Fast-growing producer services and other services. The growth of R&D, value added and research productivity is compared for these sectors and the largest gap between R&D and value added is located to the fast growing sectors of the economy.

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