Total factor productivity changes in Russian regions in 2008–2016

The research focuses on assessing the changes in the total factor productivity of Russian regions in 2008–2016. The macroeconomic theory and the theory of economic growth constitute the methodological basis of the study. The F?re-Primont productivity index and its decomposition into measures of the shift in the production possibilities frontier and the catchup relative to this frontier are applied to evaluate productivity. The authors use a smoothed bootstrap method to check the assumption underlying the calculation of the productivity change index. The mapping method allows visually representing the estimates. The findings indicate that in 2009–2016, total factor productivity in most parts of Russia fell and in 2016, the indicators for most of the subjects of the Federation were worse than in the crisis year of 2009. At the same time, almost all regions became closer to the production possibilities frontier. The sharpest decline in productivity was in the oil regions of the Federation and in Chukotka, i.e. in the regions that accumulated fixed assets faster than others. The findings also reveal that the change in productivity, rather than aggregate inputs, explains most of the differences in the dynamics of GRP, both between regions in selected years and for each region in different years, which is of practical importance for developing regional development policies. The research finds a negative relationship between changes in total factor productivity and inputs. This result contradicts the well-known models of economic growth and therefore is theoretically valuable.