Total factor productivity and economic efficiency in the Gulf cooperation council (GCC) countries

Abstract

This study focuses on identifying the level and evolution of total factor productivity (TFP) and determining its role as a qualitative source of economic growth in the Gulf Cooperation Council (GCC) countries. This is an issue of particular importance because of the recent increases in external global crises, such as the Covid-19 pandemic, and large fluctuations in oil prices. In addition, there are existing internal challenges in the GCC countries, such as high rates of population growth, labor market pressures, a large-sized public sector, and an inefficient private sector. These challenges require achieving a qualitative improvement in the sources of economic growth by raising the efficiency of the use of available productive resources through relying on the growth of TFP as a primary driver of sustainable economic growth. The results of the study showed that the growth rates in TFP were generally negative and below the average international levels. This can be attributed to several reasons such as weak innovation and the adoption of a stagnant development model. The study presents some recommendations to address these challenges.

Keywords

• Total factor productivity
• sources of economic growth
• GCC countries
• empirical evidence
• Development Studies
• Development Policy