Border areas can play a crucial role in market integration and infrastructure development between Central Asian countries, thus creating favorable economic growth and regional cooperation conditions. This study aims to assess the economic impact of border areas between Kazakhstan and Uzbekistan, focusing on their role in enhancing market integration and infrastructure development to foster regional growth and cooperation.  Focusing on labor and capital as essential production drivers, this study employs a sophisticated panel data regression model to explore the Cobb-Douglas production function’s application in these border territories. The research findings indicate that regions’ elasticity towards capital and labor inputs vary, necessitating differentiated economic strategies. For capital-intensive areas, we recommend prioritizing investments in infrastructure and technology to boost production outputs. Conversely, in regions where labor significantly influences production, the emphasis should be on human capital development through education, training, and improved labor market conditions. The study’s insights into the evolving trade relations between the two countries underscore the need for flexible economic policies to enhance regional integration and cooperation. This research not only fills a crucial knowledge gap but also offers a blueprint for leveraging the diverse economic landscapes of Central Asia’s border areas in future policy-making and regional economic strategy.

Acemoglu, D., & Zilibotti, F. (2001). Productivity Differences. The Quarterly Journal of Economics, 116(2), 563–606. https://doi.org/10.1162/00335530151144104

Arellano, M. (2003). Panel data econometrics. Oxford University Press.

Baltagi, B. H. (2005). Econometric analysis of panel data. John Wiley & Sons.

Baltagi, B. H. (2008). Econometric analysis of panel data, 4th ed. John Wiley & Sons.

Barro, R. J. (1991). Economic growth in a cross section of countries. The Quarterly Journal of Economics, 106(2), 407–443.

Barro, R. J., & Sala-i-Martin, X. (2004). Economic growth, 2nd ed. MIT Press.

Becker, G. S. (1964). Human capital theory. Columbia University Press.

Becker, G. S. (1993). Human capital: A theoretical and empirical analysis, with special reference to education. University of Chicago Press.

Beramendi, P., & Cusack, T. R. (2009). Diverse disparities: The politics and economics of wage, market, and disposable income inequalities. Political Research Quarterly, 62(2), 257–275. https://doi.org/10.1177/1065912908319220

Blank, N. (2011). Making migration policy: Reflections on the Philippines’ bilateral labor agreements. Asian Politics & Policy, 3(2), 185–205. https://doi.org/10.1111/j.1943-0787.2011.01255.x

Brülhart, M., & Koenig, P. (2006). New economic geography meets Comecon: Regional wages and industry location in central Europe. Economics of Transition, 14(2), 245–267. https://doi.org/10.1111/j.1468-0351.2006.00256.x

Cameron, A. C., & Trivedi, P. K. (2005). Microeconometrics: Methods and applications. Cambridge University Press.

Caselli, F. (2005). Accounting for cross-country income differences. In: Handbook of economic growth. North Holland.

De Cordier, B. (1996). Ethnic conflicts and ecological degradation in Central Asia: The Ferghana Valley and northern Kazakhstan (French). Central Asian Survey, 15(3–4), 399–411. https://doi.org/10.1080/02634939608400959

Gaur, P. (2021). Economic initiatives in central Asia: challenges and prospects. International Relations and International Law Journal, 96(4). https://doi.org/10.26577/irilj.2021.v96.i4.04

Ghebrezgabher, M. G., & Sereke, T. E. (2021). Assessment of the Trend and Development of Regional Economy in Central Asia. Global Business & Economics Anthology, II, 16–29. https://doi.org/10.47341/21122

Greene, W. H. (2003). Econometric analysis, 5th ed. Prentice Hall.

Harris, J. R., & Todaro, M. P. (1970). Migration, unemployment and development: A two-sector analysis. The American Economic Review, 60(1), 126–142.

Hausman, J. A. (1978). Specification Tests in Econometrics. Econometrica, 46(6), 1251. https://doi.org/10.2307/1913827

Hsiao, C. (2003). Analysis of panel data, 2nd ed. Cambridge University Press.

Isiksal, A. Z. (2023). The role of natural resources in financial expansion: evidence from Central Asia. Financial Innovation, 9(1), 78. https://doi.org/10.1186/s40854-023-00482-6

Johnston, J., & DiNardo, J. (1997). Econometric methods, 4th ed. The McGraw-Hill Companies, Inc.

Jumayev, F. (2021). The role of the developed and developing economies in the Central Asian countries’ economic growth. Revista Amazonia Investiga, 10(48), 181–188. https://doi.org/10.34069/ai/2021.48.12.19

Krugman, P. (1994). The age of diminished expectations: U.S. economic policy in the 1990s. MIT Press.

Lewis, W. A. (1954). Economic Development with Unlimited Supplies of Labour. The Manchester School, 22(2), 139–191. https://doi.org/10.1111/j.1467-9957.1954.tb00021.x

Li, J., Chen, Y., Li, Z., et al. (2019). Low-carbon economic development in Central Asia based on LMDI decomposition and comparative decoupling analyses. Journal of Arid Land, 11(4), 513–524. https://doi.org/10.1007/s40333-019-0063-0

Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1), 3–42.

Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A Contribution to the Empirics of Economic Growth. The Quarterly Journal of Economics, 107(2), 407–437. https://doi.org/10.2307/2118477

Martínez-Zarzoso, I., Nowak-Lehmann, F., Klasen, S., et al. (2016). Does German Development Aid boost German Exports and German Employment? A Sectoral Level Analysis. Jahrbücher Für Nationalökonomie Und Statistik, 236(1), 71–94. https://doi.org/10.1515/jbnst-2015-1003

Mavlyanova, N. G., Lipatov, V. A., & Tiefenbacher, J. P. (2021). Regional Cooperative Disaster Risk Management in Central Asian Borderlands. Journal of Borderlands Studies, 38(3), 417–439. https://doi.org/10.1080/08865655.2021.1943493

Moscow State University. (1991). UN/USSR, Interregional Training Programme in Population and Development Planning. High population increase rates. Integration, 29, 29–30.

Mukhtarova, K., Makasheva, K., Kenzhebaeva, Z., et al. (2021). Prospects for economic cooperation in central Asia. Central Asia and the Caucasus, 22(3), 094–108. https://doi.org/10.37178/ca-c.21.3.08

Nicolae-Balan, M. (2009). Labor force mobility—Factor of economic growth in Romania. Annals of Spiru Haret University Economic Series, 1, 141–152. https://doi.org/10.1111/j.1468-0475.2008.00458.x

Nikonov, I., Radionov, S., & Mukhametov, O. (2023). National Debt in Central Asia: Risks and Management Approaches. Higher School of Economics Economic Journal, 27(4), 550–573. https://doi.org/10.17323/1813-8691-2023-27-4-550-573

Plottka, J., Drews, L., Ferris, E., Andžāns, M., & Gussarova, A. (2019). Central Asia in 2030—SEnECA forecasts for the region and the role of the European Union. In: SEnECA—Policy Paper: Strengthening and Energizing EU-Central Asia Relations. DuEPublico: Duisburg-Essen Publications Online, University of Duisburg-Essen. https://doi.org/10.17185/DUEPUBLICO/48711

Pomfret, R. (2020). The Central Asian Countries’ Economies in the Twenty-First Century. In: Akimov, A., Kazakevitch, G. (editors). 30 Years since the Fall of the Berlin Wall. Palgrave Studies in Economic History. Palgrave Macmillan. https://doi.org/10.1007/978-981-15-0317-7_3

Ramos, R., Sanromá, E., & Simón, H. (2016). The part-time wage penalty: Does bargaining coverage outweigh regional differences in Spain? The Economic and Labour Relations Review, 27(3), 368–386. https://doi.org/10.1177/1035304616659984

Rasoulinezhad, E., & Saboori, B. (2018). Panel estimation for renewable and non-renewable energy consumption, economic growth, CO2 emissions, the composite trade intensity, and financial openness of the commonwealth of independent states. Environmental Science and Pollution Research, 25(18), 17354–17370. https://doi.org/10.1007/s11356-018-1827-3

Romer, P. M. (1986). Increasing Returns and Long-Run Growth. Journal of Political Economy, 94(5), 1002–1037. https://doi.org/10.1086/261420

Romer, P. M. (1990). Endogenous Technological Change. Journal of Political Economy, 98, S71–S102. https://doi.org/10.1086/261725

Sysoeva, N., & Rudneva, V. (2021). Russian border regions in the economic corridor of China-Mongolia-Russia. Studies of the Industrial Geography Commission of the Polish Geographical Society, 35(2). https://doi.org/10.24917/20801653.352.4

Toktomushev, K. (2019). Central Asia and the Silk Road Economic Belt. In: Series on China’s Belt and Road Initiative. World Scientific Publishing. https://doi.org/10.1142/9789813277250_0007

Tsoi, A. V. (2022). Central Asia in modern integration economic processes. Regional Economics: Theory and Practice, 20(1), 28–48. https://doi.org/10.24891/re.20.1.28

Vacas-Soriano, C., Fernández-Macías, E., & Muñoz de Bustillo, R. (2019). Recent trends in wage inequality from an EU perspective: a tale of two convergences. Empirica, 47(3), 523–542. https://doi.org/10.1007/s10663-019-09436-7

Vokhidova, M. K., & Abdullaeva, A. R. (2024). Directions of Trade Relations of Uzbekistan with the Countries of Central Asia. In: Advances in Science, Technology and Innovation. Springer Nature Switzerland. https://doi.org/10.1007/978-3-031-49711-7_76

Wooldridge, J. M. (2002). Econometric analysis of cross section and panel data. MIT Press.

Yormirzoev, M. (2021). Economic Growth and Productivity Performance in Central Asia. Comparative Economic Studies, 64(3), 520–539. https://doi.org/10.1057/s41294-021-00156-1