Determinants of Small Business Competitiveness in Uzbekistan: The Role of Finance, Innovation and the Business Environment

This study examines the determinants of small-business competitiveness across Uzbekistan’s 14 first-level regions, focusing on finance, innovation-enabling capability and the business environment. Competitiveness is operationalized as revealed market performance rather than a composite index: real sales per active small-business entity for the domestic market and small-business exports for external performance. Two-way fixed-effects models use 2013–2022 domestic data (N=140) and 2013–2024 export data (N=168), with one-year-lagged regressors and 9,999-repetition wild cluster bootstrap inference. Lagged capital intensity is positively associated with domestic performance (β=0.2249, wild p=0.0016), while overdue-payables pressure is negatively associated (β=−0.0675, p=0.0376). Human-capital intensity, interpreted as an innovation-enabling capability, is positively associated with exports (β=0.9704, p=0.0108), as is SME employment capacity (β=2.6171, p=0.0246). Net entry is negatively associated with sales per firm, but this relationship is interpreted as market churn rather than evidence against competition. Robustness tests show that capital is the most stable domestic determinant, while institutional policy-exposure proxies do not support causal claims. The findings favor differentiated support combining productive capital, liquidity resilience, skills and capability building.

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