An econometric study of the impact of fixed capital investment on labor productivity

Abstract

Aim. The presented study aims to identify the main drivers for increasing labor productivity in the Russian economy.Tasks. Econometric modeling is used to assess the impact of fixed capital investment on labor productivity indicators in Russia and to formulate priority directions for improving labor productivity in Russia.Methods. To achieve the set aim, the authors build an econometric model that makes it possible to assess the dependence of labor productivity rates on regressors such as volume index of fixed capital investment, internal R&D costs, real accrued wages of employees, and depreciation of fixed assets (in percentage points). Data provided by the Federal State Statistics Service serves as the empirical basis of this study. R Studio software is also used.Results. It is established that the volume of fixed capital investment and the degree of depreciation of fixed assets are significant factors that can affect labor productivity rates. The results of the study also suggest that regressors such as real accrued wages of employees and internal R&D costs are insignificant factors.Conclusions. The statement that fixed capital investment serves as a basis for labor productivity growth is substantiated. Therefore, the government’s efforts in the coming years should be aimed at creating favorable conditions for increasing investment spending in the real sector of the economy. The study also focuses on the need to eradicate the phenomenon of the ‘working poor’ and to increase the efficiency of interaction between research centers and the business community.