Examining the Nexus Between Human Capital Development and Investment Flows in Uzbekistan’s Regions: An Econometric Approach

This study investigates the interrelation of human capital, investment and regional economic development using balanced panel data for the period of 2010 to 2014 by applying the Panel Autoregressive Distributed Lag (ARDL) model for 14 regions of Uzbekistan. ADF and PP tests were used to determine the type of stationarity of the variables, while the bounds testing approach was developed to test cointegration in the panel model, meaning a long-run equilibrium relationship exists. The results found that major elements of human capital development, such as education and health, are significant and affect life expectancy positively, while unemployment affects it negatively in the panel group, respectively. According to the coefficient of the error correction term (ECT), short-run disequilibrium converges to a long-run equilibrium at a reasonably fast speed. The ECT was confirmed to be negative and statistically significant. The study provides strong empirical evidence which highlights the importance of human capital investment in a regional development strategy to enhance economic growth and achieve sustainable economic prosperity.