Abstract
Manufacturing's aggregate growth and its internal composition both influence the shaping of industrial development. In this analysis, the structural transformation of the manufacturing sector across 14 regions in Uzbekistan between 2014 and 2024 is then examined. The sectors of light manufacturing, heavy manufacturing, and extractive industries were distinguished from one another. We utilize a Lilien-type structural change index and pooled OLS regression with robust standard errors in order to test if within a region, the reallocation of sectors and the increase in heavy manufacturing weight correlate with gross regional product (GRP) growth and labor productivity. The structural change index (β = 0.880, p = 0.003) and share of heavy manufacturing (β = 15.255, p < 0.001) significantly projected GRP growth and explained 41.8% of the variance in GRP respectively. Our stratified analysis by tier revealed that the productivity dividends associated with reallocation were greatest in regions with low to moderate levels of heavy industry orientation (r = 0.61), whereas the dividends decreased with increasing rates of industrialization (r = 0.32). Therefore, these results indicate that the rate and not just the direction of structural change will have an impact on regional economic growth outcomes.