ECONOMIC PRODUCTIVITY: FACTOR APPROACHES

. The article focuses on economic productivity and have stressed the theory of marginal utility (productivity). In modern researches such aggregate indicators as a total factor productivity and a multifactor productivity prevail. Total Factor Productivity is measured by combining the effects of all there sources used in the production of goods and services (labour, capital, materials, energy, etc.) and dividing it into the output. Multifactor productivity (MFP) is the ratio of total output to a subset of inputs. A subset of inputs might consist of only labour and materials or it could include capital. MFP is the residual contribution to output growth of an industry or economy after calculating the contribution from all its factor inputs. The OECD methodology examines key single-factor (aggregated) indicators of labour and capital productivity


Important research results. Theory of marginal utility (productivity)
Over time, the issue of wealth was transformed into a standard category of gross domestic product, while the issues of its generation were localised by the competitiveness of nations (Porter, 1990) and by the study of productivity of two main factors: labour and capital. In fact, during the second half of the XX century and at the beginning of the XXI century the productive capacity of a nation has been grounded mainly upon models of total factor productivity (TFP) or multifactor productivity (MFP).
To better understand these complex categories, let us consider the basic principles and concepts with reference to the theory of marginal utility (productivity) in the context of the marginalism paradigm that led to the second revolution in economics. Measuring marginal productivity is carried out gradually in several steps. First, the general formula of marginal physical productivity is determined: MPP n = TPP n -TPP n-1, where MPP n is a marginal physical productivity of the n-th unit of labour; TPP n is a total physical productivity of the n-th number of workers; TPP n-1 is a total physical productivity of the n-1 unit of workers.
Marginal physical productivity means an increase in output caused by one factor of productivity while the remaining factors are unchanged. Illustration. Six workers produce 120 quintals of wheat. If another (seventh) worker is involved in production, the wheat harvest should total 140 quintals. In this case, the maximum physical productivity of an additional employee is 20 quintals (140-120 = 20). At the same time, there may be situations when the seventh employee may have lower productivity (lack of additional equipment, lack of experience, physical capabilities, etc.), then the question arises whether it is feasible or not to attract an additional unit of labour in the context of marginal utility theory.
Marginal revenue productivity is defined as an increase in total revenue due to the attraction of a unit of additional factor upon the invariability of other factors. Suppose that 1 worker produces wheat resulting in revenue of $ 50. Another worker is hired, and as a result the revenue increases to $ 60. In this case, the marginal revenue productivity the second worker equals $ 10. (60-50 = 10).
The value (cost) of marginal productivity is equal to the product of marginal physical productivity and the market price of the product. VMP = MPP х AR, where VMP is a value of marginal productivity; MPP is a marginal physical productivity; AR is an average revenue (market price of the product). If the market price of 1 quintal of wheat is $ 10, and the marginal physical productivity of the 1st additional worker is 20 quintals of wheat, then the marginal productivity of the additional worker will be equal to $ 200. (20x10 = 200).
Total Factor Productivity and Multifactor Productivity Measuring of productivity is a complex process that has its own history, initiated, as noted above, by the fathers of economics (Malthus, Smith, Marshall, etc.). In modern researches such aggregate indicators as a total factor productivity (TFP) and a multifactor productivity (MFP) prevail. Total Factor Productivity is measured by combining the effects of all the resources used in the production of goods and services (labour, capital, materials, energy, etc.) and dividing it into the output;utilizes more than a single factor. Multifactor productivity is the ratio of total output to a subset of inputs. A subset of inputs might consist of only labour and materials or it could include capital. MFP is the residual contribution to output growth of an industry or economy after calculating the contribution from all its factor inputs (Camus 2007, 21,182).
The OECD provides a tabular version for measuring the performance of essential elements of the economic system (table 1). The OECD methodology examines key single-factor (aggregated) indicators of labour and capital productivity, considering total output and costs and, most importantly, the value added, which reflects the real increase in the welfare of the nation. This creates the possibility of a separate analysis of productivity of both labour and capital, to carry out their synthesis based on multifactoriality and finally take into account the full range of factors based on the KLEMS model. A database of comparable statistics at the industry level is being developed to analyse the relationship between skills growth, technological progress and innovation, on the one hand, and productivity, on the other. An important unit of measurement of the productivity of the nation (country, national economy) is also the total factor productivity (TFP). It is grounded on the Cobb-Douglas production function with its parameters reflecting the contribution of two main factorslabour and capital -to the country's GDP growth.
Ln TFP = ln Y-αln L -(1-α)ln K, where TFP is a total factor productivity; Youtput of GDP; α is the labour (wages) share in the GDP; 1-α is the capital share in the GDP; Llabour; Кcapital. The dynamic aspect involves determining the rate of the TFP growth defined as: where p t is the rate of TFP growth; Y t is output (GDP), dY t / dt is the rate of output growth, L is the labour input, K is the capital input, α is the share of wages in the national GDP, Актуальні проблеми міжнародних відносин. Випуск 147. 2021.
. 59 t is the time required for economic measurements. The logarithmic version of TFP growth (dynamics) is described as follows: p t = dlnY t / dt -αdlnL t / dt -(1-α) dlnK t / dt (Wolff 2014, 134,137). In addition to this basic formula, there are a number of methods for determining TFP: empirically based quantitative indices, in particular, the hyperbolic Diewert index, econometric methods, stochastic boundary element methods, operating environment analysis, and so on. Exploring the total factor productivity, the authors also take into account such factors as innovation, education, market efficiency, infrastructure, institutions (Kim, Loayza 2019, 6-10).
In the framework of European cohesion policy, it is important to equalize productivity levels between different regions, divided into four categories: frontier regions, catching-up regions, keeping pace regions and diverging regions. Frontier regions were the regions with the highest level of productivity in each country, and the population of the region amounted to 10% of the total population. Catching-up regions have reduced the gap in productivity levels vis-à-vis Frontier regions during the period of consideration. Keeping pace regions have maintained the productivity level gap of (_+ 5%) vis-à-vis frontier regions. Diverging regions have increased the productivity gap vis-à-vis frontier regions. (table 2). As can be seen from the table 2 almost 2/3 of the EU GDP and of its employment fall upon keeping pace and diverging regions. At the same time, they contributed only 45%, to the EU economic growth during 2000-2014, while Frontier regions representing 19% of employment provided for 32% of the EU economic growth rate and 24% of the EU GDP in 2014. Catching-up regions show slow progress for a slight increase in the contribution to the EU GDP and a slight decrease in employment. Regions are also differentiated as mostly urban (urban), intermediate and mostly rural. Thus, rural regions among Diverging regions make up almost half (48%), while they account for 42% within Catching-up regions. At the same time, the share of mostly urban regions is 25% in diverging regions and 40% in keeping pace regions.
In research, it is essential to compare the TFP of different countries, to identify trends in convergence or divergence in productivity levels. There are β and σ convergence (Wolff 2014, 61-62). β-convergence is based on the fundamental principles of neoclassical growth theory and characterises mainly the convergence of indicators of less developed countries with industrialised ones in terms of economic development (new global convergence). At the same time, countries with a lower initial level of capital accumulation and a lower level of income accumulate capital faster than the average rate, while countries where the initial capital accumulation exceeded the average level slow down the rate of capital accumulation. σ-convergence means reducing inequalities in productivity and per capita income among the richest and poorest countries (Wolff 2014, 61-62; Jablonski 2010, 57-58).
The first and the second indicators may differ. The country may be approaching the growth rate of developed countries and even be ahead of the same. However, the gap in GDP per capita may increase.
The main indicators are the volume of GDP per capita, the human development index, indices and indicators of sustainable development, etc. If a number of countries have the same initial conditions and show close convergence rates, this process is called club or group convergence. A clear example of such convergence is the economic development of the so-called Asian tigers in the 70s (Singapore, Republic of Korea, Hong Kong, Taiwan) and in the 80s (Malaysia, Thailand, Indonesia, India) of the last century.
Productivity is measured, as noted, based on total factor productivity (TFP) or multifactor productivity (MFP) models. The starting points are economic growth models with an emphasis on the Solow balance, the Cobb-Douglas production function. Thus, productivity is a relative indicator, the basis of which in the narrow sense is the analysis of the contribution of two key factors-labour and capital-in the generation of national wealth. Thus, the Bank of England's model for determining total factor productivity uses two main factorslabour and capital. In a broad sense, the TFP and MFP models being not fundamentally different from each other use a much wider set of criteria and indicators. For example, the European KLEMS project (model) use such components as energy, materials, services in addition to labour and capital. Canadian experts offer a much wider range of indicators in the measuring of total factor productivity. In particular, we are talking about intermediate costs (materials, business services, loan capital), labour costs, renewable capital costs, inventories (material values), land resources, other natural resources (fish stocks, forests, oil fields, mines), environmental improvement, working capital, cash and other financial instruments, knowledge capital (education, innovation, R&D, etc.), infrastructure capital (Koszerek et al. 2007, 1.) Some studies use the methodology of differentiation of productivity into three approaches: labour productivity, multifactor productivity and public productivity or productivity of social services (table 3). The table allows us to conclude that labour productivity is measured by the volume of production compared to the number of employees or the final indicator of total value added. The multifactor indicator consists of the total value added formed by the volume of production by labour, the volume of production by capital and the balance of Solow. Productivity of public services is measured by the total output where intermediate services are added to the multifactor indicator. This methodology allows carrying out economic and statistical observations of the dynamics of the main indicators of productivity of different hierarchical levels. An option of comparing the cost-output of V. Leontief is introduced for a more detailed analysis, which complements the theory and methodology of productivity study (Leontief 2006, 85-87).

Productive capacity of the nation
The productive capacity of the nation is a much broader concept than the productivity of the economy or its individual units. This concept resonates in some way with the concept of "competitive advantage of nations" introduced by M. Porter. Many factors that distinguish competitiveness, especially at the macro level, are directly linked to productive capacity. However, the analysis of productive capacity the focus goes not only and not so much to current state of affairs, on the one hand, that is crucial for the initial stage of the study. The term ability contains the potential for diversification, growth, has a certain mobilising, perspective orientation. In particular, A. Toynbee focuses on the positive sources of "new creative capacity" (Toynbee 1995, 20). On the other hand, the purely economic, technological (according to Porter) components are supplemented by nation-building ones such as anthropological, psychological, mental, socio-cultural, institutional, etc. Therefore, the theoretical foundations of the nation's productive capacity are based on a wide range of factors and processes that result into its economic potential and reveal the mechanisms and tools of its effective use.
A set of factors of national productivity is considered in a detailed version. These include, firstly, the accumulation of capital by attracting domestic and foreign investment; introduction of the newest technologies capable to modernise manufacture; organisation of production and technological processes comparable to the best world models. Secondly, they are deepening of the division and cooperation of labour in the system of network chains at the national and global levels at different stages of production, distribution, creating effective coordination mechanisms for prices, contracts, formal and informal agreements, communications, trust, reputation and more. Thirdly, they are about the development of production infrastructure (transport, energy, telecommunications); improvement of social infrastructure, including public institutions, nongovernmental organizations, business and social networks, etc. Fourthly, this means increasing the educational level and competence of those employed in the economy, which according to some calculations, is pivotal in increasing productivity (Nelson 2006).
Indirect productivity factors: support of civil liberties; openness to foreigners; positive relationships with subordinates; self-esteem, sense of personal competence; participation in public and national affairs; interpersonal trust and satisfaction with one's own life.
Experts also take into account the mental model of the nation consisting of definite and specific beliefs, preferences, conclusions and goals. This is a kind of mental map of the nation. There is a set of institutions, beliefs and guidelines that are either pro-innovative and create conditions for productivity and prosperity, or anti-innovative that inhibit progress and development.
Thus, F. Hayek noted that the Anglo-Saxon legal system created better preconditions, a wider corridor of freedom for economic development and entrepreneurship than the continental one. Similarly, according to M. Weber and other researchers, Protestant ethics gave a huge impetus to undermine the feudal foundations and the rapid development of capitalist relations, productivity growth, capital, economy and the nation as a whole (Weber 1994, 56-57). In analysing the productive capacity of the Ukrainian nation, as well as other communities, an important component is the consideration of the business culture of the people. To this end, Lewis distinguishes three groups of business cultures: monoactive, polyactive, reactive. Ukrainian business culture tends to be polyactive characterised by: general planning, multitasking; flexibility in terms of working hours; non-punctuality, unpredictability of the schedule and rapid change of plans according to the degree of significance of an event, overlapping between the project, loose interpretation of facts, dominant collectivism, high power distance (distance between leader and subordinate), high desire to avoid uncertainty.
According to the calculations of the Federal Bank of St. Louis, the total productivity of factors of production in Ukraine was 0.48 in 1990 compared to the United States, and only 0.176 in 1999, which was due primarily to the transformation crisis after the collapse of the Soviet Union. These indicators illustrate, firstly, the low level of productivity of Ukraine's economy, especially given the key indicators: GDP per capita and the average wage. Secondly, there is a clear trend of volatility, instability of economic processes, vulnerability to internal and external shocks. Third, the weak productivity of the main factors of productionlabour and capital with a high level of education of the workforce, the presence of one of Europe's largest engineering corps and scientistshighlights a component that has not yet been sufficiently formalised -the country's institutional system that is the main brake on stable economic progress.

Conclusions
The theoretical and methodological foundations of productivity are laid by the classical authors of economics, who considered these processes through the prism of the division and cooperation of labour, the relationship between the employee and the owner of the means of production. Over time, the focus has shifted on the productivity of the two main factors of production, labour and capital, based on the Cobb-Douglas production function, taking into account the Solow balance and factors such as innovation, education, market efficiency, infrastructure, institutions, and so on. On this basis, the main indicators of productivity nowadays have become the total factor productivity and multifactor productivity. At the same time, the creative heritage of Toynbee, Porter and others indicates an expanded interpretation of productivity as the productive capacity of individual nations and countries. In this case, in addition to purely economic, technological nation-building components other ones such as anthropological, psychological, mental, socio-cultural, institutional, etc. are considered.