Productivity as a source of economic growth - current situation and prospect in the Republic of North Macedonia
Journal
Economic Development, Journal of Institute of Economics - Skopje
Date Issued
2022-10
Author(s)
Elizabeta Djambaska
Aleksandra Lozanoska
Irina Piperkova
DOI
https://www.doi.org/10.55302/ED22242031dj
Abstract
Productivity is an indicator of the use (exploitation) of the
potential of inputs for creating new value added in the economy. In the long
term, productivity growth is dependent upon innovation, investment in physical capital, and investment in human capital. These immediate factors are
shaped by the environment in which enterprises operate: market structures,
infrastructure, the institutional framework and the quality of governance. The
main objective of this paper is to study productivity growth in the Republic of
North Macedonia and to analyses and propose measures that can be taken to
stimulate productivity.
The analysis include: labor productivity, total factor productivity (TFP)
and the level of enterprise productivity. Labour productivity in North Macedonia is low, and in the past five years even negative. The calculations of the
total factor productivity using the Solow’s growth model and Cobb-Douglas
production function for the past twenty years, shows that GDP average growth
is 4,97% and the TFP contribute by 1,69%.The level of enterprise productivity
is also low.Therefore, the expectations for the increase of the GDP and reaching economic growth that can be sustainable is possible with increasing total
factor productivity in the North Macedonia.
potential of inputs for creating new value added in the economy. In the long
term, productivity growth is dependent upon innovation, investment in physical capital, and investment in human capital. These immediate factors are
shaped by the environment in which enterprises operate: market structures,
infrastructure, the institutional framework and the quality of governance. The
main objective of this paper is to study productivity growth in the Republic of
North Macedonia and to analyses and propose measures that can be taken to
stimulate productivity.
The analysis include: labor productivity, total factor productivity (TFP)
and the level of enterprise productivity. Labour productivity in North Macedonia is low, and in the past five years even negative. The calculations of the
total factor productivity using the Solow’s growth model and Cobb-Douglas
production function for the past twenty years, shows that GDP average growth
is 4,97% and the TFP contribute by 1,69%.The level of enterprise productivity
is also low.Therefore, the expectations for the increase of the GDP and reaching economic growth that can be sustainable is possible with increasing total
factor productivity in the North Macedonia.