Journal of Applied Economic Research
ISSN 2712-7435
Labor profitability and labor productivity in Russia: the Direction of Capital
Kireev V.E.
Abstract
The research is devoted to the analysis and evaluation of labor profitability and labor productivity and their relationship to capital flows. The objective of the research is to define the relationship between labor profitability and investment in fixed assets at various levels. The subject is economic activities and regions of Russia. The study period covers the period from 2002 to 2013. A new method of calculating the index of labor profitability is trialed which places a particular emphasis on labor costs. An important place is occupied by the methods of descriptive statistics. The indicators are examined in two ways: static and dynamic. The author's approach is to distinguish between the indicators of profitability and productivity due to the specific features of particular elements of the indicators and their role in economic development. The author identifies the leading regions and outsiders by using the indices being studied and emerging relationships. There is a paradox from the industrial perspective: capital is attracted by high-performance sectors, whereas in regions investments follow high-yielding labour. The attention is focused on the differentiation of gaps in performance. The results of the study can be used by federal and regional authorities in order to raise capital for various territories. They may serve as an indicator of investment attractiveness of Russia's regions when designing long-term development programmes. The main conclusion is based on the grounds that the implementation of economic restructuring policies of import substitution must pay attention to the profitability of labor that can serve as a signal to potential investors. In this regards, an increase in capital flows is expected both from foreign and domestic investors.
Keywords
Key words: labor profitability; labor productivity; investments in fixed assets; labor costs; regions; economic activities.
About Authors
DOI: http://dx.doi.org/10.15826/vestnik.2016.15.2.16
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