TFP ESTIMATION: EVIDENCE FROM SILK ROAD REGION
DOI:
https://doi.org/10.55439/EIT/vol13_iss2/665Keywords:
Total factor productivity, Growth theory, Growth accounting, Silk Road region, GOLS.Abstract
The paper estimates the total factor productivity (TFP) of 86 countries along the ancient Silk Road region from 1991 to 2019, employing the growth accounting (GA) method and the generalized OLS (GOLS) model. Unlike many studies, it considers three factors of production: capital, labor, and natural resources. The findings indicate average TFP contributions to economic growth of 0.52 for high-income, 1.55 for upper-middle-income, 0.73 for lower-middle-income, and -0.23 for low-income countries. The TFP estimates for the income group samples are more accurate than those derived from the total sample of countries. Natural resources significantly contribute to economic growth. This TFP analysis offers valuable insights for policymakers, researchers, and businesses, helping them understand productivity dynamics, identify the areas for improvement, and develop policies and strategies to enhance productivity and economic growth. The study enriches literature on TFP estimation in Silk Road countries.
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