Is Mining Fuelling Long-Run Growth in Russia? Industry Productivity Growth Trends in 1995–2012
GDP per capita growth rates in Russia have been amongst the highest in the world since the mid-1990s. Previous growth accounting research suggests that this was mainly driven by multi-factor productivity (MFP) growth. In this paper we analyse the drivers of Russian growth for thirty-four industries for the period from 1995 to 2012. We pay in particular attention to derive a proper measure of capital services, instead of the stock measures used in previous research. Using these new measures, we find that aggregate GDP growth is driven as much by capital input as MFP growth. Mining and Retailing take up an increasing share of the input, but have poor MFP performance. In contrast, MFP growth was high in goods producing industries but this sector’s GDP share declined. The major drivers of MFP growth were in high-skilled services industries that were particularly underdeveloped in the Russian economy in the 1990s.