PurposeThe paper investigates the relationship between credit to the economy, foreign direct investment (FDI) and the unemployment rate in Uzbekistan using macroeconomic time series over 2004–2019.Design/methodology/approachThe study estimates the relationship by applying a vector autoregression model, which is considered a “workhorse” model for policy analysis to capture dynamic relationships in economic time series.FindingsThe results suggest both growth in credit to the economy and FDI Granger cause a change in the unemployment rate. The authors found 1% increase in bank credits to the economy growth decreases the unemployment rate by 0.096 pp. over eight years. On the contrary, 1% positive shock to FDI growth increases the unemployment rate by 0.0036% in the context of Uzbekistan.Practical implicationsUzbekistan should improve FDI absorptive capacity, particularly human capital and financial market development, through growth-enhancing structural reforms in the financial sector to stimulate economic growth and employment. The attracted FDI funds should focus on productive and economic sectors with high labor-absorptive capacity, such as financial and professional services, healthcare and biomedicine, creative industries and media, software sector.Originality/valueThe study contributes to the empirical literature on employment effects of FDIs and credit to the economy of Uzbekistan.

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The study investigates the impact of corruption on private firm performance in Uzbekistan. The results point up a negative relationship between corruption and firms performance in Uzbekistan. We found the perceived corruption deteriorates firms’ performance and decreases firms’ total annual sales by 28.8% in private firms in Uzbekistan. The study enriches existing empirical studies examining the effect of corruption on firm performance in the context of various countries and regions.

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