Impact of Economic and Social Factors on Urban Development: A Comprehensive Analysis of Cities in Kazakhstan

Abstract

This study presents a comprehensive analysis of the development dynamics of cities in Kazakhstan, focusing on the interplay between economic and social factors and their impact on the Gross Regional Product (GRP). Employing a dataset encompassing a range of indicators, cities were categorized into development groups (Highly Developed, Moderately Developed, Less Developed) based on normalized composite scores. The study aimed to test two central hypotheses through Partial Least Squares Regression (PLSR) analysis: firstly, that economic factors are significant positive determinants of GRP, overshadowing the influence of social factors; and secondly, that social factors significantly influence GRP, with economic factors playing a lesser role. The analysis revealed that economic factors, including SME activity, retail trade, fixed capital investment, and tax revenue, exhibited a substantial impact on GRP, whereas social factors like population growth, average salary, and income levels showed relatively less influence. The findings underscore the predominance of economic determinants in shaping regional productivity, providing critical insights for strategic urban development planning and policy-making. By highlighting the differential impacts of economic and social factors on urban development, this study contributes to the broader understanding of regional growth dynamics and offers a data-driven foundation for targeted developmental initiatives in Kazakhstan's urban centers.