Article: Sectoral total factor productivity and its determinants: firm-level evidence from Kazakhstan Journal: International Journal of Services, Economics and Management (IJSEM) 2026 Vol.17 No.2 pp.221 - 242 Abstract: This paper analyses total factor productivity (TFP) and domestic competition among firms in Kazakhstan. We show that TFP in many industries falls significantly from 2009 to 2017. At the same time, 3 to 10 of the largest firms occupy a significant market share in most industries, demonstrating the elements of oligopolistic competition. We estimate the impact of various financial indicators and variables, such as subsidies, R&&D, and transportation costs on firm-level TFP. The results show that increased investments, profits, wages, subsidies and the presence of employees under 30 years of age or with higher education have a significant positive effect on TFP. In addition, the uneven distribution of subsidies among firms also contributes to the development of a monopoly in the market. Statistics show that five companies in the market receive up to 80% of subsidies in manufacturing and agriculture, which aggravates the market power of these firms. Inderscience Publishers - linking academia, business and industry through research

Title: Sectoral total factor productivity and its determinants: firm-level evidence from Kazakhstan

Authors: Zarina Adilkhanova; Aibek Sagynayev; Azat Aituar

Addresses: Monetary Policy Department, National Bank of Kazakhstan, Astana, Kazakhstan ' International School of Economics, Maqsut Narikbayev University, Astana, Kazakhstan ' International School of Economics, Maqsut Narikbayev University, Astana, Kazakhstan

Abstract: This paper analyses total factor productivity (TFP) and domestic competition among firms in Kazakhstan. We show that TFP in many industries falls significantly from 2009 to 2017. At the same time, 3 to 10 of the largest firms occupy a significant market share in most industries, demonstrating the elements of oligopolistic competition. We estimate the impact of various financial indicators and variables, such as subsidies, R&&D, and transportation costs on firm-level TFP. The results show that increased investments, profits, wages, subsidies and the presence of employees under 30 years of age or with higher education have a significant positive effect on TFP. In addition, the uneven distribution of subsidies among firms also contributes to the development of a monopoly in the market. Statistics show that five companies in the market receive up to 80% of subsidies in manufacturing and agriculture, which aggravates the market power of these firms.

Keywords: total factor productivity; TFP; sectoral analysis; Herfindahl-Hirschman Index; HHI; concentration ratio; Kazakhstan.

DOI: 10.1504/IJSEM.2026.152455

International Journal of Services, Economics and Management, 2026 Vol.17 No.2, pp.221 - 242

Received: 20 Feb 2024
Accepted: 18 May 2025
Published online: 20 Mar 2026 *

Title: Sectoral total factor productivity and its determinants: firm-level evidence from Kazakhstan

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