Total factor productivity convergence across the Kazakh regions

Abstract

This article examines total factor productivity (TFP) convergence across the regions of Kazakhstan over the period of 1997–2013. Using a growth accounting methodology we found that the average level of TFP fell by almost 40% over the period under consideration. Several panel unit root tests confirm that the whole set of Kazakh regions and the group of non-oil regions converged in terms of TFP, while the group of oil-rich regions diverged. This result explains sigma-divergence of the GRP per capita across the regions of Kazakhstan by divergence in capital intensity.