CLUSTER POLICY AND DIGITAL TRANSFORMATION AS DRIVERS OF REGIONAL INDUSTRIAL STRUCTURAL CHANGE: A PANEL ANALYSIS FOR KASHKADARYA REGION

Abstract

This paper investigates the role of cluster policy and digital technology adoption in accelerating structural change within the industrial sector of Kashkadarya region, Uzbekistan. Using an unbalanced panel of 148 enterprises over 2018–2023, the study employs K-means and two-stage clustering to classify enterprises into structural typologies, supplemented by shift-share analysis and a three-dimensional structural assessment framework encompassing diversification, concentration, and per capita efficiency. Regression and scenario analyses show that cluster participation raises enterprise-level total factor productivity by 19.5 percentage points (p = 0.061), while digitalization investment delivers a 34.1 percentage point gain per unit increase (p = 0.016). A three-scenario forward projection demonstrates that full implementation of the cluster-digital policy bundle by 2030 could reduce the Herfindahl–Hirschman Index from 2,840 to 1,450, raise digitalized enterprise share from 12% to 62%, and triple the innovation product ratio from 8% to 30%. The findings support place-based industrial policy as the most effective instrument for structural transformation in resource-dependent transition-economy regions.