KPI-Linked Investment Mechanism for Textile Firms in Uzbekistan: 2023–2025 Evidence

Abstract

This paper develops a KPI-linked investment mechanism aimed at improving the investment attractiveness of textile enterprises and motivates policy and managerial priorities using official sector-level evidence from Uzbekistan for 2023–2025. The empirical motivation is a conversion gap: fixed capital investments expanded rapidly, while textile export value declined over two consecutive years despite a shift toward finished products. Using National Statistics Committee press releases, we document that textile exports in 2024 amounted to USD 2,867.4 million (10.6% of total exports) and decreased by 6.7% compared to 2023; in 2025 they reached USD 2,632.5 million (7.8%) and decreased by 8.2% compared to 2024. Over 2021–2025, total fixed capital investments increased from 236.6 to 591.1 trillion soums, and in 2025 manufacturing absorbed 160.5 trillion soums (27.2% of total). We propose a five-block mechanism—financial, fiscal, institutional, infrastructure, and managerial—mapped to transmission channels affecting the cost of capital, risk profile, productivity, energy and resource efficiency, quality losses, and cash-flow predictability. A composite KPI architecture and an index-building procedure are provided to support enterprise ranking and monitoring of mechanism effectiveness. The results imply that prioritizing energy- and resource-efficiency upgrades, quality-loss reduction, and bankable project preparation, while strengthening one-stop services and infrastructure reliability, can improve investment attractiveness by reducing operational risk and increasing forecastable returns. The paper contributes a replicable IMRaD-aligned framework for aligning policy tools with measurable enterprise outcomes in an energy- and export-sensitive sector.