ANALYSIS OF THE DEGREE OF DEPENDENCE OF KAZAKHSTAN'S ECONOMIC SECTORS ON IMPORT AND ASSESSMENT OF THE POTENTIAL FOR REDUCING DEPENDENCE ON IMPORTS

Purpose of the research. This article attempts to analyze the degree of import dependence of Kazakhstan’s economic sectors and further defines product groups that import could be substituted by the local production. Methodology. Quantitative research analysis is conducted by using dataset and contemporary methodology of the United Nations Broad Economic Categories classification. Calculations of the coefficients of the Rotterdam model were made using the apparently unrelated regression method. It was assumed that the cost reduction will lead to a significant increase in the production of goods, thereby defining import substitution economic activities. Originality / value is confirmed and justified by the lack of in-depth research to determine specific types of economic activities for which Kazakhstan can replace imports. Furthermore, the practical value of this study also concerns government reforms to identify industries that require government support measures. Findings . Key findings of the article include selected 29 economic activities, import of which can be potentially substituted by the domestic production. For these selected industries, the coefficients of cross-elasticity of the production of domestic goods at prices for imported goods turned out to be significant. Results of the Rotterdam model suggested that an increase in prices for imported goods by 1 % leads to an increase in demand for domestic products from 0.09 to 4.99 % in these selected industries.