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Survival of the Fittest? Measuring the Strength of Market Selection on the Example of the Urals Federal District


  • Ivan Savin

    (Ural Federal University, Yekaterinburg, Russia)

  • Oleg Mariev

    (Ural Federal University, Yekaterinburg, Russia)

  • Andrey Pushkarev

    (Ural Federal University, Yekaterinburg, Russia)


It this article we analyze the strength of market selection for a wide range of industries in the Urals Federal District (UFD) and compare it with the results for several foreign countries. The empirical analysis is based on the Ruslana database provided by Bureau van Dijk (BvD) for the period from 2006 to 2015. For the first stage of the analysis, we resort to the well-dis­cussed method of aggregated labor productivity decomposition at the industry level into two main processes, namely, the growth of productivity within the firm and the redistribution of market shares between firms on the market. The results obtained show that the industrial productivity growth is almost entirely explained by the increase in productivity at the level of the firms, while the role of market selection is negligible. However, due to a number of limitations of this approach, it would be incorrect to deny the significance of the competition as a whole. For this reason, at the second stage we consider the relationship between the growth of firms’ revenues and their productivity directly. Our results show that the role of market selection in explaining firm growth is small in Russia and is lower in comparison with developed countries. This result holds if instead of labour productivity one uses total factor productivity. The revealed weak interrelation indicates the need to improve industrial policy in the direction of increasing the efficiency of competition.

Suggested Citation

  • Ivan Savin & Oleg Mariev & Andrey Pushkarev, 2019. "Survival of the Fittest? Measuring the Strength of Market Selection on the Example of the Urals Federal District," HSE Economic Journal, National Research University Higher School of Economics, vol. 23(1), pages 90-117.
  • Handle: RePEc:hig:ecohse:2019:1:4

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    Cited by:

    1. Andrey Pushkarev & Anna Sennikova & Oleg Mariev, 2020. "Econometric Estimation Of Market Selection In Russia: Different Performance Indicators," Proceedings of Economics and Finance Conferences 10913104, International Institute of Social and Economic Sciences.

    More about this item


    market selection; productivity decomposition; firm growth; replicator dynamics;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General


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