Sector trends of total factor productivity: where is the growth potential?

Abstract

Objective: to identify industry trends in aggregate factor productivity, labor productivity and capital productivity in economic sectors. The hypotheses are: there is a continuing slowdown in aggregate factor productivity in the Russian economy sectors; there is a gap in aggregate factor productivity in various complexes of industries. Methods: Cobb–Douglas production function, multiple regression, Domar aggregation, Gini coefficient, graphical visualization. Results: the study revealed a more efficient use of labor resources in contrast to capital, the latter being accumulated everywhere. The highest increase in labor productivity was noted in financial and insurance activities, manufacturing industries, professional, scientific and technical activities. There is a cyclical dynamics of aggregate factor productivity, its most stable growth and a positive cumulative technological shift marked from 2017 until 2021. They are observed in the manufacturing and investment complexes of the Russian economy (financial and insurance activities), and in agriculture.A decrease in total factor productivity was found in the mining industry, transportation and storage, hotels and catering, construction, education, and healthcare. Scientific novelty: it consists in a change in the total factor productivity and the total technological shift in the context of sectors and complexes of sectors of the Russian economy from 2011 to 2021. Practical significance: the study results can be used for the policy of stimulating internal sources of economic growth, to improve sectoral recommendations of innovation policy.

Keywords

• regional and branch economics
• economic growth
• production function
• aggregate factor productivity
• innovation