The Automotive Industry of Uzbekistan and the “Flying Geese” Paradigm

Foreign direct investment theories and practice
First of all, the approaches and theories of FDI are of interest to Uzbekistan, which can be used to strengthen its position as a FDI recipient country. In particular, the “flying geese” paradigm is, in essence, a “catch-up cycle” model. The "wild flying geese" paradigm was developed in the late 1930s. by Japanese scientist K. Akamatsu, as a generalized theory of economic development, reflecting the dynamics of internal processes and changes in the competitiveness of the Japanese industrial sector. Japan is at the head of the "flock", and then other "geese" - East Asian countries - fly at a certain time interval. Japanese firms invested in Taiwan, Singapore, Hong Kong and South Korea (the "Asian tigers"), which in subsequent years invested in neighboring Southeast Asian countries - Malaysia, Indonesia, the Philippines, etc. (see Fig. 1).



Fig. 1. Paradigm of "flying geese". Source: [23].

At the same time, the theory of "Paths of investment development" of nations by D. Dunning and R. Narula examines the dependence of exports and imports of capital on the level of economic development and shows that the path to the export of capital lies through its initial import, i.e. demonstrates the important role of foreign investment in the development of countries, especially at the stage of transition to market relations. The study of the practice of Uzbekistan shows the interconnectedness of the above processes and the interdependence of investment policies.

3. Results.
Our study demonstrated an increased share of the automotive industry in the economic development of Uzbekistan and the export diversification of a country. The expanded production of vehicles and spare parts allowed UzAuto Motors JSC to successfully operate in the markets of neighboring countries of Central Asia. According to D. Dunning’s ideological basis of the international movement of capital, the investment flow usually is directed from countries where capital is conditionally abundant in those countries where it is conditionally available in limited quantities [24]. Using the theory of industrial organization by S. Heimer [25] we came to an answer why direct investments prefer to export or license the use of their monopolistic advantage. So, exporting can be complicated by tariffs, other barriers, such as transportation costs. Another advantage of having a direct presence in the local market can be the adaptation of the product to suit local conditions, stimulating local demand. We tracked the opening by an Uzbek automaker (instead of export) of joint ventures in the markets of neighboring countries of Central Asia.
We have put forward a hypothesis about the formation of the Central Asian model of the flying geese paradigm. Comparing the emerging model with the paradigm in Southeast Asia, we have identified a number of features and common patterns and differences