REGIONAL ENTERPRISE PROFITABILITY IN UZBEKISTAN: THE ROLE OF FINANCIAL EXPENSES AND EXPORT ACTIVITY

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This study examines the relationship between financial expenses, export activity, and regional enterprise profitability in Uzbekistan over the period 2015–2024. The empirical analysis employs a strongly balanced panel dataset consisting of 14 regions and 140 observations obtained from the Statistics Agency under the President of the Republic of Uzbekistan. To account for negative profitability observations, the dependent variable was transformed using the inverse hyperbolic sine (IHS) transformation, while explanatory variables were transformed using natural logarithms. The study applies fixed-effects panel regression models with year fixed effects. Diagnostic procedures include the Hausman specification test, variance inflation factor (VIF) analysis, and the Pesaran cross-sectional dependence test. Given the presence of cross-sectional dependence, the final specification was estimated using Driscoll–Kraay standard errors. The empirical findings indicate that financial expenses are negatively associated with regional enterprise profitability, whereas export activity demonstrates a positive association with profitability across the sample period. The study contributes regional panel evidence to the literature on enterprise performance in transitional economies.