TOTAL FACTOR PRODUCTIVITY IN KAZAKHSTAN'S SMALL AND MEDIUM ENTERPRISES (SME) SECTOR
No Thumbnail Available
Date
2024-12
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Nazarbayev University Graduate School of Business
Abstract
This study investigates the key drivers of Total Factor Productivity (TFP) in small and medium enterprises (SMEs) in Kazakhstan, focusing on a combination of firm-level data (2011–2023) and advanced econometric methods. TFP, which is a measure of efficiency and innovation, is analyzed using Olley-Pakes (OP), Levinsohn-Petrin (LP), Ackerberg-Caves-Frazer (ACF), and kernel-based learning techniques (KLT) in this paper.
Exchange rate shocks serve as instrumental variables to address endogeneity concerns and explore the impact of materials, capital wage bill, energy costs, firm size, and other inputs on productivity. The results reveal that firm size and wage bills positively influence TFP under specific conditions, whereas inappropriate use of energy and capital can have negative influence on productivity.
The use of each method helps to analyze the estimation approaches properly, providing a clear understanding of TFP dynamics. To be able to proceed with practical policy recommendations, counterfactual simulations of wage bill reductions were created.
This research contributes to the existing literature by focusing on advanced methodologies to estimate TFP and providing practical policy recommendations to enhance SME productivity in Kazakhstan.
Description
Keywords
Type of access: Embargo
Citation
Nuraliyeva, M. (2024). Total Factor Productivity in Kazakhstan's Small and Medium Enterprises (SME) sector. Nazarbayev University Graduate School of Business.