The Determinants of Total Factor Productivity Growth: an Analytical Study of a Cross Section of Countries for the Period (2003-2016)

Abstract

            This study tests the effect of a large number of independent variables that control the growth of the total productivity, which amounted to 112 variables, gathered from what is mentioned in the specialized theoretical and applied literature. The data for these variables were taken from global reports of sound international organizations and reliable databases covering the period 1991-2016. The data of the dependent variable, the growth of the total factor productivity, were taken from the database of the world development indicators. The study covered 61 countries for which data were available. The study included three regression models to explain why the growth of the overall productivity factor varied between countries.

            The results showed that the following independent variables - human capital, technology level in the previous period, convergence index, nature of the political system, population growth, economic openness, foreign direct capital - each have a significant impact on the growth of the total factor productivity. It was also found that the promotion of this growth requires the implementation of several policies, including those of support for health and education, and the reduction of poverty and severe income inequality.