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Productivity growth and inefficient firms' exit from the market

Author

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  • Bessonova, E.

    (Bank of Russia, Moscow, Russia
    National Research University "Higher School of Economics", Moscow, Russia)

  • Tsvetkova, A.

    (Bank of Russia, Moscow, Russia
    National Research University "Higher School of Economics", Moscow, Russia)

Abstract

Many industries of the Russian economy show lower productivity at the aggregated level than in advanced countries. The low productivity level is in large part due to the widening efficiency gap between leader companies and a large group of low productive firms in individual industries. Among low productive firms, the catching-up impulse is concentrated in a small group of young and fast growing companies. In recent years, the number of such companies has not been large enough to scale down the heterogeneity of productivity. If the scarring effect of the crisis provoked by the coronavirus pandemic dominates the Russian economy and number of start-ups with growth potential decreases, this will aggravate the problem of already existing heterogeneity of productivity across firms and the lack of catching-up growth of most low productive companies. Acceleration of productivity growth requires coordinated economic policy fostering competition; improving people's education level and labour mobility; Russian companies' entry in foreign markets and integration in value chains; firms' exit from the informal sector; innovation and adaptation of new technologies; access to finance, especially for SMEs.

Suggested Citation

  • Bessonova, E. & Tsvetkova, A., 2020. "Productivity growth and inefficient firms' exit from the market," Journal of the New Economic Association, New Economic Association, vol. 48(4), pages 185-196.
  • Handle: RePEc:nea:journl:y:2020:i:48:p:185-196
    DOI: 10.31737/2221-2264-2020-48-4-8
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    References listed on IDEAS

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    1. Stepanova, A. & Podukhovich, D., 2023. "CEO decision-making horizon and R&D investments. Evidence from Russia," Journal of the New Economic Association, New Economic Association, vol. 59(2), pages 85-118.

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    More about this item

    Keywords

    creative destruction; productivity gap; convergence;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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