The E mpirical Research on Caus al Relationship Between Export a nd Foreign Investments in the E conomy of Uzbekistan Based on Granger Test

Abstract

The relationship between export and foreign investments is becoming more and more relevant topic in the economies of many countries in the world. This relationship, its direction and mechanism are, particularly crucial for emerging markets. This paper investigates the direction of the relationship between the export and foreign investments of Uzbekistan based on the data on previous years. Since the government have been reforming the macroeconomic policy of Uzbekistan gradually towards openness in recent years, it is very important to find the direction of the association before forming national strategy to encourage the export of the country and to attract foreign investments to the country. In this study Granger causality test is used to determine the direction of the relationship using time series data from 2005 to 2017. With respect to the findings of the study, it can be seen that the volume of export has positive impact on the foreign investments. However, there is no sufficient evidence to support the idea that foreign investment has significant impact on the volume of export. The results conclude that in Uzbekistan, export volume is one of the key factors that have been contributing to the attractiveness of investment climate in recent years.