Foreign Direct Investment and Electricity Consumption During Uzbekistan’s Green Transition

Аннотация

This study examines the relationship between foreign direct investment inflows and energy consumption in
the context of Uzbekistan. The analysis employed time series data obtained from the World Bank, covering the period
from 1991 to 2023. This study utilizes the Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least
Squares (DOLS) models to examine the relationship between foreign direct investment inflows and power consumption in
the context of Uzbekistan. The findings from the Johansen cointegration test indicated the existence of cointegration linkages
among the variables examined in the study. The findings of the FMOLS and DOLS models indicated a statistically
significant negative association between electricity consumption and foreign direct investment inflows in Uzbekistan, as
well as an insignificant link in the case of DOLS. Additional findings indicate that there exists a statistically significant and
positive correlation between economic growth and the influx of foreign direct investment. The Granger causality analysis
yielded findings indicating a one-way causal relationship, with economic growth exerting a causal influence on the inflows
of foreign direct investment. The study suggests that a revision of policies pertaining to power consumption and economic
growth is necessary for the purpose of attracting foreign direct investment inflows in Uzbekistan. It emphasizes the importance
of involvement from the government and policymakers in this endeavor.