Denmark: Selected Issues

IMF Staff Country Reports, September 13, 2024

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Denmark: Selected Issues

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Bibliographic details

• Published: September 13, 2024
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400288227.002

Macroeconomic focus

• The paper analyzes the macroeconomic impact of the pharmaceutical sector, with a focus on Novo Nordisk.
• Emphasis on the productivity impact of Novo Nordisk on the rest of the Danish economy.

Key empirical findings

• Empirical evidence suggests only weak correlations between productivity shocks at Novo Nordisk and overall economic growth.
• Empirical evidence suggests only weak correlations between Novo Nordisk’s productivity and that of other firms.
• The findings indicate limited risk that Denmark’s booming pharmaceutical company would become its “Nokia.”
• Most pharmaceutical production occurs overseas under Danish ownership, limiting domestic linkages in:
  • Employment
  • Supply chains
• Empirical results indicate limited spillover effects through productivity channels.
• Caveat: The empirical results may underestimate the influence of Novo Nordisk due to limited data.

Implications and interpretation

• The pharmaceutical sector is identified as a key driver of growth, but its direct domestic economic linkages are somewhat limited.
• Limited observed productivity spillovers suggest modest systemic risk transmission through productivity channels from a large pharmaceutical firm to the broader economy.
• Data limitations imply uncertainty around the full extent of Novo Nordisk’s influence on domestic productivity and growth.

Metadata and classification

• Subject: Covered bonds, Financial institutions, Financial sector policy and analysis, Labor productivity, Nonbank financial institutions, Production, Productivity, Systemic risk assessment
• Keywords: covered bond bond market, Covered bonds, E. policy option, energy firm, Global, Labor productivity, mitigating factor, Nonbank financial institutions, Policy consideration, Productivity, productivity shock, shocks to Novo Nordisk, Systemic risk assessment

Content in this bundle

• Denmark: Selected Issues; IMF Country Report No. 24/293; August 22, 2024
  • Denmark: Selected Issues; IMF Country Report No. 24/293; August 22, 2024 (Markdown version)
  • Denmark: Selected Issues; IMF Country Report No. 24/293; August 22, 2024 (PDF)