ESTIMATING THE TOTAL FACTOR PRODUCTIVITY: EVIDENCE FROM THE GREAT SILK ROAD REGION
Ключевые слова:Total factor productivity (TFP), growth theory, Pooled OLS, Fixed Effect, Random Effect, foreign direct investment (FDI)
In the paper the levels of total factor productivity (TFP) are estimated for the panel data of 58 countries located on the ancient Great Silk Road for the period of 1991-2019 with Pooled OLS, Random Effect and Fixed Effect models. The findings are:
1) Random Effect model was the most suitable model, although the three models produced approximately the same estimates of parameters
2) when the total sample of 58 countries was split into two samples of 19 developed and 39 developing countries and the three models were applied for the smaller samples, the models were not significant due to multicollinearity issue
3) the output elasticities of capital and labor comply with the figures ( and ) obtained in many empirical studies
4) in the sample of 10 post-soviet countries, the TFP figures are strongly correlated in 1991-2001 except for Armenia and in 1991-2019 except for Uzbekistan
5) Spearman’s rank correlation test indicates a strong positive relation between the estimated total factor productivity and foreign direct investment for most post-soviet countries.