Extensive Growth at Its Limits: Panel Evidence on the Determinants of Regional Tourism Employment in Uzbekistan

Abstract

Uzbekistan has expanded its tourism supply very rapidly: accommodation capacity grew 5.8-fold between 2016 and 2025. This study asks whether further physical expansion still pays off in regional tourism employment, and which destination attributes are associated with it.

A balanced panel of 14 regions observed over 2018–2024 (N = 98) is used to estimate a log-linear Cobb–Douglas function of tourism employment on accommodation capacity, tangible cultural heritage, domestic travel activity, recreational infrastructure and population. Pooled, between, fixed-effects and random-effects estimators are compared, with cluster-robust and Driscoll–Kraay standard errors, a variance decomposition and dynamic-panel checks.

Across regions, accommodation capacity is the strongest correlate of tourism employment: its elasticity is 0.546 in the pooled model and 0.606 in the between model (both p < 0.01). Within regions over time the capacity elasticity falls to 0.026 and is significant only at the 10% level with Driscoll–Kraay errors, whereas domestic travel activity is positive and significant (0.069 and 0.077, p < 0.05). The sum of elasticities in the pooled model (0.901) indicates decreasing returns to scale. Dynamic estimators are uninformative with seven periods, so the coefficients are interpreted as associations rather than causal effects.

The paper provides the first region-level panel evidence for Uzbekistan that separates long-run cross-regional differences from short-run within-region change. It shows that the extensive, capacity-led growth model is approaching its limit and that utilisation of existing capacity and domestic demand deserve priority.