The Export-Led Growth Hypothesis: Small-Business Exports and Economic Growth in Uzbekistan

This paper tests the export-led growth (ELG) hypothesis through the small-business export channel in Uzbekistan over 2010–2025. Official statistics show that small-business exports rose from USD 1.78 billion to USD 12.38 billion, lifting their share in total exports from 13.7% to 36.6%. We estimate a Balassa–Ram growth regression with wild-bootstrap inference, an ARDL bounds test with simulated finite-sample critical values, Toda–Yamamoto causality tests with bootstrap p-values and a Bayesian VAR whose Minnesota-prior tightness is selected by maximizing the marginal likelihood. The growth elasticity of small-business exports is small and insignificant (0.005; bootstrap p = 0.50), the bounds test finds no levels relationship (F = 1.71), and Granger non-causality cannot be rejected in either direction. The raw correlation between the two growth rates (r = 0.43) is driven by the common 2020 shock and falls to 0.09 once that year is excluded. In a pseudo out-of-sample exercise, the BVAR reduces the root mean squared error of a random walk by 35%, but adding small-business exports does not improve GDP forecasts. Conditional on the nine-month outturn, real GDP growth is projected at 8.3% in 2026 and 6.9% per year in 2027–2030 (68% band: 5.8–8.0%). The rapid expansion of small-business export volumes has thus not, by itself, raised aggregate growth; export-promotion policy should target the productivity of exporting firms and the sophistication of their exports.