[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-108559-en":3,"doc-seo-108559-105":31,"detail-sidebar-cat-0-en-105":92},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":21,"is_downloadable":21,"audit_status":21,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":28,"seo_description":14,"update_tm":29,"read_time":30},108559,8796095461564,"Liam","https://ap-avatar.wpscdn.com/davatar_155a257f0dc6eb9ab79c44ca47cae57d",8,"Research & Report","Georgia Country Economic Memorandum - Chapter 3 - Drivers of Firms' Productivity and Job Creation","Productivity is presented as the most important long-run determinant of growth and living standards, reflecting how efficiently firms combine inputs to produce goods and services amid rising input scarcity. Evidence from Georgian firms (2007–2019) shows mixed sector performance, with disappointing productivity growth in trade and hospitality and limited gains in manufacturing and services. Employment growth is driven mainly by large firms, while young firms create many jobs but stabilize after early expansion. Weak reallocation and scaling of more productive firms, plus inefficient product-market functioning and limited capability upgrading, underpin the results. The chapter highlights reforms: improving access to finance, promoting formalization, and strengthening competition.","Public Disclosure Authorized Public Disclosure Authorized  \nGeorgia Country Economic Memorandum  \nChapter 3: Drivers of firms’ productivity and job creation  \n\n| Drivers of Firms’ Productivity and Jobs Creation Key Messages\u003Cbr>1. Productivity matters: in fact, in the long run, it is the most important determinant of growth and economic wellbeing. Productivity is the efficiency with which firms combine inputs to produce goods and services. Firms and economies globally struggle with the increasing scarcity of production inputs. Therefore, improving the production efficiency – producing both more and better goods and services with the same amount of resources – contributes to sustained prosperity. In fact, over the longer term, productivity is the most important determinant of income and living standards in a country (Figure 1, Figure 2) . A well-known and often used quote says that “Productivity isn't everything, but, in the long run, it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.” (Krugman, 1990) . Much earlier than Krugman, a medieval Arab thinker, Ibn Khaldun argued that “civilization and its well-being, as well as business prosperity, depend on productivity”(Muqaddimah, 1377) . |  |  |\n| --- | --- | --- |\n| Figure 1. Productivity and income levels Figure 2. Productivity and poverty reduction |  |  |\n|  |  |  |\n| Source: World Bank. | Source: World Bank, 2020.\u003Cbr>Note: The Y-axis shows the annual change in poverty\u003Cbr>rates between 1981 and 2015. |  |\n\n2. Productivity growth in a relatively large sample of Georgian firms during the 2007-2019 period was somewhat disappointing, although significant heterogeneity exists across sectors.1 Especially concerning, given the number of workers employed, was the negative productivity growth in trade and hospitality services. In general, while construction showed strong positive productivity growth, Georgia’s manufacturing and services firms did not become more productive. In addition, only the construction sector appears to allocate resources towards more productive firms. In manufacturing and services sectors, the correlation between market shares and levels of productivity is typically negative, indicating imperfectly functioning markets. The contribution of entrants and exiters has been small, and not always in productivity enhancing manner.  \n3. Large firms dominate employment growth in Georgia and, to a lesser extent, productivity growth; startups are dynamic but fail to expand after their initial growth spur. Large firms have significantly higher employment growth rates and a higher TFP level, though not necessarily TFP growth. At the same time, young firms are characterized by high growth rates, both in terms of employment and in terms of TFP; however, starting from year three, this growth path quickly stabilizes. These two findings appear to summarize Georgia’s low contribution of allocative efficiency to TFP growth: large firms with declining TFP are expanding, while small firms with improving TFP are not growing.2 In terms of employment, results differ from documented findings and show that young firms contribute disproportionately to job creation (Criscuolo & Gal, 2014; Haltiwanger J. J., 2013; Haltiwanger J. e., 2017;  \n1 The sample was drawn from firms participating in Geostat’s Business statistics survey for which TFP could be calculated. The survey covered firms in manufacturing, construction, sales and repair of vehicles, wholesale and retail trade, accommodation and restaurants, and transport and support activities.  \n2 To the degree that these results hold for firms for which we cannot estimate the TFP (which tend to be relatively smaller), the actual TFP dynamics could be better than estimated and reported earlier.  \nEslava, 2012) . In Georgia’s enterprise sector, labor is moving across sectors in a manner that works against productivity, as commerce sectors","cbCaioMKid8PNXvF","https://ap.wps.com/l/cbCaioMKid8PNXvF","pdf",2532309,4,1,42,"English","en",105,"# Drivers of Firms’ Productivity and Jobs Creation\n## Productivity and long-run growth\n## Georgian firm performance (2007–2019)\n## Firm size, allocation, and TFP dynamics\n## Product markets and reform priorities","[{\"question\":\"Why is productivity emphasized as a key driver of growth and wellbeing?\",\"answer\":\"Productivity determines how efficiently firms convert inputs into goods and services. Over the long run, it is presented as the most important determinant of income and living standards, shaping sustained prosperity.\"},{\"question\":\"What does the evidence say about productivity growth across Georgian sectors from 2007 to 2019?\",\"answer\":\"Productivity growth is described as disappointing overall, with significant differences by sector. Trade and hospitality show negative productivity growth, construction shows strong positive growth, while manufacturing and services do not become more productive.\"},{\"question\":\"How do firm dynamics affect job creation in Georgia?\",\"answer\":\"Large firms dominate employment growth, and startups show early dynamism but fail to expand much after initial growth. Young firms contribute disproportionately to job creation, even though their growth stabilizes from about year three.\"}]","Georgia Country Economic Memorandum - Chapter 3 - Drivers of Firms' Productivity and Job Creation | PDF",1784472267,106,{"code":4,"msg":32,"data":33},"ok",{"site_id":25,"language":24,"slug":34,"title":13,"keywords":35,"description":14,"schema_data":36,"social_meta":87,"head_meta":89,"extra_data":91,"updated_unix":29},"georgia-country-economic-memorandum-chapter-3-drivers-of-firms-productivity-and-job-creation","",{"@graph":37,"@context":86},[38,54,69],{"@type":39,"itemListElement":40},"BreadcrumbList",[41,45,49,52],{"item":42,"name":43,"@type":44,"position":21},"https://docshare.wps.com","Home","ListItem",{"item":46,"name":47,"@type":44,"position":48},"https://docshare.wps.com/document/","Document",2,{"item":50,"name":12,"@type":44,"position":51},"https://docshare.wps.com/document/research-report/",3,{"item":53,"name":13,"@type":44,"position":20},"https://docshare.wps.com/document/georgia-country-economic-memorandum-chapter-3-drivers-of-firms-productivity-and-job-creation/108559/",{"url":53,"name":13,"@type":55,"author":56,"headline":13,"publisher":58,"fileFormat":61,"inLanguage":24,"description":14,"dateModified":62,"datePublished":63,"encodingFormat":61,"isAccessibleForFree":64,"interactionStatistic":65},"DigitalDocument",{"name":9,"@type":57},"Person",{"url":42,"name":59,"@type":60},"DocShare","Organization","application/pdf","2026-07-29","2026-07-19",true,{"@type":66,"interactionType":67,"userInteractionCount":20},"InteractionCounter",{"@type":68},"ViewAction",{"@type":70,"mainEntity":71},"FAQPage",[72,78,82],{"name":73,"@type":74,"acceptedAnswer":75},"Why is productivity emphasized as a key driver of growth and wellbeing?","Question",{"text":76,"@type":77},"Productivity determines how efficiently firms convert inputs into goods and services. Over the long run, it is presented as the most important determinant of income and living standards, shaping sustained prosperity.","Answer",{"name":79,"@type":74,"acceptedAnswer":80},"What does the evidence say about productivity growth across Georgian sectors from 2007 to 2019?",{"text":81,"@type":77},"Productivity growth is described as disappointing overall, with significant differences by sector. Trade and hospitality show negative productivity growth, construction shows strong positive growth, while manufacturing and services do not become more productive.",{"name":83,"@type":74,"acceptedAnswer":84},"How do firm dynamics affect job creation in Georgia?",{"text":85,"@type":77},"Large firms dominate employment growth, and startups show early dynamism but fail to expand much after initial growth. Young firms contribute disproportionately to job creation, even though their growth stabilizes from about year three.","https://schema.org",{"og:url":53,"og:type":88,"og:title":13,"og:site_name":59,"og:description":14},"article",{"robots":90,"canonical":53},"index,follow",{"doc_id":7,"site_id":25},{"code":4,"msg":5,"data":93},[94,98,102,106,111,116,121,124,129,132,136],{"id":21,"doc_module":4,"doc_module_name":47,"category_name":95,"show_sort_weight":96,"slug":97},"Story & Novel",90,"story-novel",{"id":48,"doc_module":4,"doc_module_name":47,"category_name":99,"show_sort_weight":100,"slug":101},"Literature",80,"literature",{"id":20,"doc_module":4,"doc_module_name":47,"category_name":103,"show_sort_weight":104,"slug":105},"Exam",70,"exam",{"id":107,"doc_module":4,"doc_module_name":47,"category_name":108,"show_sort_weight":109,"slug":110},5,"Comic",60,"comic",{"id":112,"doc_module":4,"doc_module_name":47,"category_name":113,"show_sort_weight":114,"slug":115},6,"Technology",50,"technology",{"id":117,"doc_module":4,"doc_module_name":47,"category_name":118,"show_sort_weight":119,"slug":120},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":47,"category_name":12,"show_sort_weight":122,"slug":123},30,"research-report",{"id":125,"doc_module":4,"doc_module_name":47,"category_name":126,"show_sort_weight":127,"slug":128},9,"Religion & Spirituality",20,"religion-spirituality",{"id":127,"doc_module":4,"doc_module_name":47,"category_name":130,"show_sort_weight":127,"slug":131},"World Cup","world-cup",{"id":133,"doc_module":4,"doc_module_name":47,"category_name":134,"show_sort_weight":133,"slug":135},10,"Lifestyle","lifestyle",{"id":137,"doc_module":4,"doc_module_name":47,"category_name":138,"show_sort_weight":107,"slug":139},19,"General","general"]