The granular nature of emerging market economies: The case of Kazakhstan

Jozef Konings, Galiya Sagyndykova, Venkat Subramanian and Astrid Volckaert

Economics of Transition and Institutional Change, 2023, vol. 31, issue 2, 429-464

Abstract: This paper analyzes the granularity hypothesis in a large emerging economy, Kazakhstan. We use a new longitudinal dataset at the firm level and at quarterly frequency between 2012 and 2018 to document the size distribution of firms and to provide evidence that it follows a power law. We find that the largest 30 firms explain nearly 80 percent of the growth in aggregate total factor productivity. This confirms earlier research for the U.S. and other developed countries. However, the granular nature of the Kazakh economy is even more outspoken than in other countries. Thus idiosyncratic shocks and the way they ripple through the production network matter to understand changes in aggregate productivity growth. Moreover, since these granular firms are concentrated in the oil industry it exposes the vulnerability of the economy more to unexpected shocks in one industry in particular.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/ecot.12346

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:ectrin:v:31:y:2023:i:2:p:429-464

Access Statistics for this article

More articles in Economics of Transition and Institutional Change from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().