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Determinants of Total Factor Productivity in Former Soviet Union Economies: A Stochastic Frontier Approach

Author

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  • Annageldy Arazmuradov

  • Gianmaria Martini

  • Davide Scotti

Abstract

This paper investigates the process of GDP generation in Former Soviet Union (FSU) economies to provide understanding of the impact of technology channels on countries’ efficiency. We apply a stochastic frontier approach to 15 FSU economies over the period 1995–2008, and we find that machinery imports and human capital improve a country’s efficiency. Furthermore, we show that trade in capital goods and human capital also have a positive effect on total factor productivity (TFP), which, in turn, improves real GDP growth. Hence, our results suggest that FSU countries should improve public policies that provide incentives to invest in cross-country technology transfer and in domestic education in order to improve their economic growth. Additionally, our empirical evidence argues against the resource-curse hypothesis. We also show, by computing the efficiency change and technological change indices at the country level, that FSU economies are benefiting more from catching up to the best practice frontier than from exploiting technological progress.

Suggested Citation

  • Annageldy Arazmuradov & Gianmaria Martini & Davide Scotti, 2011. "Determinants of Total Factor Productivity in Former Soviet Union Economies: A Stochastic Frontier Approach," Working Papers 1105, Department of Management, Information and Production Engineering, University of Bergamo.
    • Handle: RePEc:brh:wpaper:1105
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    1. Ranjan, K.R.H.M. & Edirisinghe, J.C. & Herath, H.M.L.K. & Jayasinghe-Mudalige, U.K. & Kuruppu, I.V. & Jayathilake, H.A.C.K. & Wijeratne, M.A. & Wijesuriya, W. & Balasooriya, D.C. & Somarathna, A.D.K.S, . "Total Factor Productivity, Efficiency, and Technical Change in Large Scale Tea Estates in Sri Lanka," Sri Lankan Journal of Agricultural Economics, Sri Lanka Agricultural Economics Association (SAEA), vol. 22(01).
    2. Feng Wang & Jianxiong Wu & Min Wu & Wen Zheng & Danwen Huang, 2021. "Has the Economic Structure Optimization in China’s Supply-Side Structural Reform Improved the Inclusive Green Total Factor Productivity?," Sustainability, MDPI, vol. 13(22), pages 1-25, November.
    3. Tenaw, Dagmawe, 2025. "Green and traditional productivity growth with natural capital: The role of resource depletion, environmental damages and sectoral composition," Resources Policy, Elsevier, vol. 103(C).
    4. Rath, Badri Narayan & Akram, Vaseem & Bal, Debi Prasad & Mahalik, Mantu Kumar, 2019. "Do fossil fuel and renewable energy consumption affect total factor productivity growth? Evidence from cross-country data with policy insights," Energy Policy, Elsevier, vol. 127(C), pages 186-199.
    5. Hoa Thanh Phan Le & Ha Pham & Nga Thi Thu Do & Khoa Dang Duong, 2024. "Foreign direct investment, total factor productivity, and economic growth: evidence in middle-income countries," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-11, December.
    6. Vaseem Akram & Badri Narayan Rath, 2017. "Export Diversification and Sources of Growth in Emerging Market Economies," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 17(3), pages 1-13, September.
    7. Junjun Tang & Xing Zhao, 2023. "Does the new digital infrastructure improve total factor productivity?," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 895-916, October.
    8. Nicholas Tsounis & Ian Steedman, 2021. "A New Method for Measuring Total Factor Productivity Growth Based on the Full Industry Equilibrium Approach: The Case of the Greek Economy," Economies, MDPI, vol. 9(3), pages 1-21, August.
    9. Xiao Xiang & Qiao Fan, 2024. "Advancing Green TFP Calculation: A Novel Spatiotemporal Econometric Solow Residual Method and Its Application to China’s Urban Industrial Sectors," Mathematics, MDPI, vol. 12(9), pages 1-33, April.
    10. Jianping Zha & Zhiyong Li, 2017. "Drivers of tourism growth," Tourism Economics, , vol. 23(5), pages 941-962, August.
    11. Maliyamu Abudureheman & Qingzhe Jiang & Jiong Gong & Abulaiti Yiming, 2023. "Estimating and Decomposing the TFP Growth of Service-Oriented Manufacturing in China: A Translogarithmic Stochastic Frontier Approach," Sustainability, MDPI, vol. 15(7), pages 1-20, March.
    12. Etienne Inedit Blaise Tsomb Tsomb & Henri Ondoa Atangana, 2023. "Multilateral environmental agreements and the growth of total factor productivity in developing countries: evidence from the foreign direct investment channel," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(11), pages 12965-12997, November.
    13. Guangming Rao & Bin Su & Jinlian Li & Yong Wang & Yanhua Zhou & Zhaolin Wang, 2019. "Carbon Sequestration Total Factor Productivity Growth and Decomposition: A Case of the Yangtze River Economic Belt of China," Sustainability, MDPI, vol. 11(23), pages 1-28, November.
    14. Salem Gheit, 2022. "A Stochastic Frontier Analysis of the Human Capital Effects on the Manufacturing Industries’ Technical Efficiency in the United States," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 8(3), pages 215-238, July.

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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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