DIVERSIFICATION AND CONCENTRATION IN A TRANSITIONREGIONAL ECONOMY: A SHIFT-SHARE AND HERFINDAHLHIRSCHMAN ANALYSIS OF SURKHANDARYA, UZBEKISTAN (2010-2025)

Abstract

This paper examines whether the observed decline in agricultural dominance in Surkhandarya Region, Uzbekistan, represents genuine economic diversification or a simple reallocation toward a new dominant sector. Using official regional statistics for 2010–2025, the study applies a long-run Shift-Share decomposition together with the Herfindahl-Hirschman Index (HHI) to separate national growth effects, industry-mix effects and region-specific competitive effects across four aggregated sectors. The share of agriculture in gross regional product (GRP) fell from 54.77% in 2010 to 37.40% in 2025, while services rose from 19.07% to 43.40%. The Shift-Share decomposition attributes the largest positive regional-shift component to services (+20,316.0 billion UZS), whereas agriculture (−13,448.5 billion UZS) and industry (−8,546.4 billion UZS) recorded negative regional effects. The HHI fell steadily from 0.3756 in 2010 to 0.2937 in 2024, indicating declining concentration, but rose again to 0.3487 in 2025 as services became dominant. These results indicate that Surkhandarya's transformation is a genuine, competitiveness-driven process concentrated in services rather than a proportional expansion of all sectors, and that a new form of sectoral concentration is emerging around services rather than agriculture.