The Impact of Economic Growth and Foreign Investment on the Advancement of E-commerce

Du Wenyang; Yihong  Zhang; Bolot  Dzhamankulov

doi:10.48161/qaj.v4n4a1024

Authors

Du Wenyang Faculty of Economics, Kyrgyz National University named after Jusup Balasagyn, Bishkek, Kyrgyz Republic;
Yihong Zhang Faculty of Economics, Kyrgyz National University named after Jusup Balasagyn, Bishkek, Kyrgyz Republic;
Bolot Dzhamankulov Department of Theoretical Foundations of Developing Economies, Institute of Economics named after academician J. Alyshbaev of the National Academy of Sciences of the Kyrgyz Republic, Bishkek, Kyrgyz Republic.

DOI:

https://doi.org/10.48161/qaj.v4n4a1024

Abstract

This study examines the interrelationship between economic growth, foreign investment, and e-commerce development in Kyrgyzstan from 2010 to 2022. Using correlation and regression analyses, the research reveals a strong positive relationship between foreign investment and GDP growth, with a 1% change in foreign investment corresponding to a 0.86% change in GDP. The study finds that increased investment and economic growth in key sectors such as information and communication, financial intermediation, and trade have significantly contributed to e-commerce expansion. This is evidenced by increases in Internet access points, mobile subscriptions, and bank card circulation. The research utilizes the UNCTAD B2C E-commerce Index to track Kyrgyzstan's progress in e-commerce readiness, showing improvements correlating with economic and investment growth. Practical implications for policymakers were created. It is recommended to prioritize policies that attract foreign investment, particularly in ICT, financial services, and trade sectors to stimulate e-commerce growth; develop targeted strategies to improve digital infrastructure and increase internet accessibility nationwide; implement regulations that facilitate secure online transactions and protect consumer rights in e-commerce; invest in digital literacy programs to increase e-commerce adoption among the population; create incentives for businesses to develop online platforms and integrate e-commerce into their operations; foster partnerships between foreign investors and local businesses to transfer knowledge and technology in e-commerce.

Downloads

Download data is not yet available.

References

Tabyshova, A. K. (2021). Prospects for the development of e-commerce in the Central Asian region (on the example of Kazakhstan, Uzbekistan, and Kyrgyzstan). Izvestiya VUZov Kyrgyzstana, 1, 116-122.

Hasanov, M. S., Nurysheva, G. G., Petrova, V. F., Syrgakbayeva, A. S., Dzhusubalieva, D. M., Dzhaambaeva, B. A., Bukhayev, A., & Shaidulina, D. R. (2017). Formation of modern Kazakh society in the framework of the Eurasian Economic Union (EAEU). International Journal of Economic Perspectives, 11(2), 822-828.

Levchenko, V. O., Podolyaka, A., & Zelensky, S. (2022). Economic and psychological aspect of legal support of probation. Social & Legal Studios, 5(4), 64-69.

Bektasheva, A. J. (2022). Digital economy as an economic system: Causes and conditions of the emergence of the digital economy. Bulletin of Osh State University, 3, 141-148.

Makeeva, S. B., & Abarbekova, A. S. (2020). Mechanisms to encourage foreign direct investment in the mining sector of the Kyrgyz Republic. Topical Issues of Modern Economics, 9, 490-497.

Jones, I. (2023). Perceptions of Chinese investments in Kyrgyzstan. In Securitization and Democracy in Eurasia: Transformation and Development in the OSCE Region (pp. 299-312). Cham: Springer.

Toktomushev, K., & Furstenberg, S. (2021). Understanding gold mining and social conflicts in Kyrgyzstan. University of Central Asia – Institute of Public Policy and Administration (IPPA) Working Paper No. 63.

Taskulova, G., Ergeshova, C., & Obitsher kyzy, J. (2022). Taxation of electronic commerce in Kyrgyzstan. Journal of Osh State University. Economics, 1(1), 114-121.

Maadanbekova, M. J. (2023). The impact of investment on the development of the economy of the Kyrgyz Republic within the EAEU. Bishkek: Kyrgyz Economic University named after M. Ryskulbekov.

Otenko, O., Malyarets, L., Barannik, I., & Budarin, O. (2023). Determining the economic sustainability reserve of economic entities in modern operating conditions. Economics of Development, 22(2), 8-18.

Song, C. Q., Chang, C. P., & Gong, Q. (2021). Economic growth, corruption, and financial development: Global evidence. Economic Modelling, 94, 822-830.

Azman-Saini, W. N. W., Baharumshah, A. Z., & Law, S. H. (2010). Foreign direct investment, economic freedom and economic growth: International evidence. Economic Modelling, 27(5), 1079-1089.

Timilsina, G. R., Hochman, G., & Song, Z. (2020). Infrastructure, economic growth, and poverty: A review. World Bank Policy Research Working Paper, 9258.

Yu, Y., Huo, B., & Zhang, Z. (2021). Impact of information technology on supply chain integration and company performance: Evidence from cross-border e-commerce companies in China. Journal of Enterprise Information Management, 34(1), 460-489.

Haji, K. (2021). E-commerce development in rural and remote areas of BRICS countries. Journal of Integrative Agriculture, 20(4), 979-997.

Vu, K., Hanafizadeh, P., & Bohlin, E. (2021). ICT as a driver of economic growth: A survey of the literature and directions for future research. Telecommunications Policy, 44(2), 101922.

Vinoth, S., Vemula, H. L., Haralayya, B., Mamgain, P., Hasan, M. F., & Naved, M. (2022). Application of cloud computing in banking and e-commerce and related security threats. Materials Today: Proceedings, 51(8), 2172-2175.

Roshylo, V. (2023). Specific features of the financial system of Ukraine in the conditions of war. Scientific Bulletin of Mukachevo State University. Series “Economics”, 10(2), 31-41.

United Nations Conference on Trade and Development. (2020). The UNCTAD B2C E-Commerce Index 2020: Spotlight on Latin America and the Caribbean.

National Statistical Committee of the Kyrgyz Republic. (2023). National accounts of the Kyrgyz Republic.

National Statistical Committee of the Kyrgyz Republic. (2023). Investments in the Kyrgyz Republic.

National Statistical Committee of the Kyrgyz Republic. (2023). Information and communication technologies of the Kyrgyz Republic.

Roshylo, V. (2022). Ways to reform the banking system of Ukraine to ensure the financial stability of economic entities. Scientific Bulletin of Mukachevo State University. Series “Economics”, 9(1), 34-40.

Makohon, V., & Adamenko, I. (2023). Financial policy of the state in the system of economic development. University Economic Bulletin, 56, 193-200.

Revak, I. O., & Gren, R. T. (2022). Digital transformation: Background, trends, risks, and threats. Social and Legal Studios, 5(2), 61-67.

Misiuk, M., & Zakhodym, M. (2023). Digitization as a tool for revitalizing the livestock industry. Ekonomika APK, 30(4), 10-24.

Feniuk, Ia. (2023). History of state regulation of financial markets: Foreign practices and lessons for Ukraine. Scientific Bulletin of Mukachevo State University. Series “Economics”, 10(2), 54-62.

Silva, P. M., Moutinho, V. F., & Paço, A. (2023). Examining the relationships between entrepreneurship, intrapreneurship, and e-commerce: Evidence from Iberian and Scandinavian countries. Revista Galega de Economía, 32(2), 1-17.

Hora, A., Kalinin, A., & Lebedev, O. (2023). Economic legal and psychological aspects of the introduction of social entrepreneurship in Ukraine. Social and Legal Studios, 6(1), 17-24.

Zakharchuk, O., Melnyk, S., Vyshnevetska, O., Popova, O., & Kotsyubynska, L. (2022). Investment and innovation development of agriculture in Ukraine. Ekonomika APK, 29(4), 10-21.

Yaremova, M., & Mytrofanova, A. (2022). Decoupling as a measurement of the environmental impact of economic growth. Scientific Bulletin of Mukachevo State University. Series “Economics”, 9(3), 30-39.

Bugas, V., & Bugas, V. (2022). Investment as a factor of economic growth. Proceedings of the III International Scientific and Practical Online Conference “Imperatives of Economic Growth in the Context of Implementation of Global Sustainable Development Goals”, 96-105.

Dzhusubaliyeva, D. M., Mynbayeva, A. K., & Assilbek, N. A. (2021). Features of digital student generation education: From theory to practice. ACM International Conference Proceeding Series, 6, 1-4.

Mojseyenko, I. P., Revak, I. O., & Demchyshyn, M. Y. (2013). Modelling state economic security by its intellectual potential parameters. Actual Problems of Economics, 150(12), 278-285.

Makowski, D., Mattan, S. B. S., Payil, I., & Lüdecke, D. (2020). Methods and algorithms for correlation analysis in R. Journal of Open Source Software, 5(51), 2306.

Heliyani, H., Tasri, E. S., Amelia, D., & Dwianda, Y. (2023). The contribution of e-commerce to economic growth in the Covid-19 era. Economics Development Analysis Journal, 12(1), 129-140.

Tenyukh, Z., Pelekh, U., & Khocha, N. (2022). Application of digital technologies in accounting and auditing at enterprises of Ukraine. Scientific Bulletin of Mukachevo State University. Series “Economics”, 9(4), 46-55.

Krysovatyy, A., & Ptashchenko, O. (2023). The mechanism of entrepreneurial innovation system in institutions of higher education. Economics of Development, 22(2), 51-60.

Shen, B., Dong, C., Tong, X., & Ngai, E. W. T. (2022). Emerging technologies in e-commerce operations and supply chain management. Electronic Commerce Research and Applications, 55, 101203.

Vipin, J., Bindoo, M., & Satyendra, A. (2021). An overview of electronic commerce (e-commerce). Journal of Contemporary Issues in Business and Government, 27(3), 665-670.

Fedorko, R., Kizák, M., & Tomášová, M. (2023). Use of Internet banking by consumers in Slovakia as an aspect of relationship marketing in electronic commerce of banks. Journal of Global Science, 8(2).

International Trade Centre. (2023). Central Asia: Ready4Trade (R4TCA).

Lopatynskyi, Yu., Shpykuliak, O., Kyfyak, V., Shelenko, D., & Diuk, A. (2023). Socio-economic role and institutional capacity of family farms in the implementation of the sustainable development goals. Ekonomika APK, 30(3), 18-28.

Hunko, K. (2023). Institutional principles of state financial control development. University Economic Bulletin, 57, 126-132.

Penkova, O., & Kharenko, A. (2023). Transformation of marketing logistics for the export of Ukrainian crop production in the context of a full-scale war with the Russian Federation. Scientific Bulletin of Mukachevo State University. Series “Economics”, 10(1), 37-48.

Omniva Logistics sees Kyrgyzstan as e-commerce hub of Central Asia. (2023).

International Trade Administration, Kyrgyz Republic – Country commercial guide. (2023).