CORPORATE GOVERNANCE QUALITY, FOREIGN DIRECT INVESTMENT, AND ECONOMIC GROWTH: A PANEL ECONOMETRIC ANALYSIS OF CENTRAL ASIAN COUNTRIES (2003–2024)

Yusufjon Po‘latov

GREEN ECONOMY AND DEVELOPMENT, 2026, vol. 4, issue 5

Abstract: This study examines the relationship between governance quality, foreign direct investment (FDI), and economicgrowth in Central Asian countries during the period 2003–2024. The research employs the Bertelsmann TransformationIndex (BTI) and a random-effects GLS panel model to analyze the direct and indirect effects of governance reforms oneconomic growth through foreign direct investment. The findings indicate that improvements in governance quality arepositively associated with FDI inflows; however, this relationship remains statistically limited, suggesting that ongoinginstitutional reforms are still developing their full potential to enhance the region’s investment attractiveness. Similarly,foreign direct investment has a positive but moderate influence on economic growth, reflecting the gradual developmentof spillover effects.The results imply that Central Asia is undergoing an active stage of institutional transformation and governancemodernization, while foreign direct investment remains largely concentrated in resource-based sectors. To transformgovernance improvements into sustainable investment-driven growth, it is essential to strengthen institutional trust,diversify investment flows, and improve public sector efficiency

Keywords: governance; foreign direct investment; BTI Index; economic growth; reforms; Central Asia (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:teu:ged000:v:4:y:2026:i:5:id:10761

DOI: 10.5281/zenodo.20513411

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