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Purpose: The study examines the impact of growing investments and increasing manufacturing activities on the trade performance in case of Uzbekistan. It also tries to explore the influence of being in CIS region and being a former part of Soviet Union on the trade patters with its major partner countries. The theoretical framework: The study takes Gravity Model as a base to formulate estimation equation where Uzbekistan trade is taken as a dependent variable. Panel dataset is prepared and random effects GLS regression is used to estimate the augmented equation. Findings: The study concludes that lately the composition of trade has shifted. It argues that trade is more based on intra-industry than comparative advantage. Yet the economy envisions strengthening its trade flows by boosting investment in fixed capital and strengthening the manufacturing sector. The study shows that manufacturing and investment in fixed capital are potentially increasing its trade performance. However, trade is still concentrated in a few markets. It is concluded that Uzbekistan’s trade differs in time (a positive indication) and within the group of countries significantly (not so good situation). Research Policy Implications: Based on the analysis, it is recommended that the economy find more global markets to realize its comparative advantage and continue the intra-industry trade within the region. Originality/Value: The study gives new insights on the most recent trends in trade patters of Uzbekistan with its major partners as well as also identifies the nature of its strength in terms of realizing comparative advantage or intra-industry trade. Based on the results the trade performance can be further increased by exploring the markets and product categories more categorically.
Kler et al. (Wed,) studied this question.