Total factor productivity analysis according to the size of economic activity and sectors in Georgia (მთლიანი ფაქტორული მწარმოებლურობის ანალიზი ეკონომიკური საქმიანობის ზომისა და სექტორების მიხედვით საქართველოში)
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Date
2020
Journal Title
Journal ISSN
Volume Title
Publisher
Ivane Javakhishvili Tbilisi State University Press
Abstract
The main driver of Georgia’s economic growth during the transformation
period was domestic demand for supported remittances, capital flows, and
economic liberalization, which led to increased productivity through sectoral
redistribution. According to the World Bank’s 2018 report, the main challenge for
the country is the high rate of sustainable economic growth. According to the same
report, in order to boost sustainable economic growth and double GDP by 2030,
the government needs to reorient its economic policy from foreign investment to
productivity.The study of the phenomenon of productivity is of great scientific,
cognitive and practical importance at the present stage.
Based on the above, within the framework of the scientific grant project of
Ivane Javakhishvili Tbilisi State University, Faculty of Economics and Business –
„Small Business Factor Productivity and Export Capabilities in Georgia”, we aimed
to investigate the relationship between enterprise size and productivity in terms
of economic activity.
McMillan’s and Rodrik’s methods were used to analyze productivity, using
which we calculated the trend of labor productivity in a separate size category. We
used the Olley and Pakes approach to assess overall factor productivity.
We first discussed labor productivity by type of economic activity for small,
medium, and large enterprises. The paper found that if large enterprises were
leading in terms of labor productivity in 2006, then the situation would change
and the productivity of small and medium enterprises would be equal to that of
large enterprises.
The study of the total factor productivity of small, medium and large
enterprises has shown that in general large enterprises are more productive than
small and medium enterprises. However, it is interesting to analyze the relationship
between size and productivity in terms of economic activity.
Description
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Keywords
Economic sector, factor productivity, production factors, enterprise size
Citation
Economics and Business, №1, 2020, pp. 119-137