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Yadulla Hasanli, Gunay Rahimli: Assessment of The Multiplicative Effects of The Mining and
                                                                                  Manufacturing Sectors nn Azerbaijan

                    This  effect  is  called  indirect  effect.  In  addition  to  these,  the  created  volume  of
                    production due to direct and indirect effects also means an increase in value added,
                    and the elements of value added (profit, labor payments, taxes on production, etc.)
                    also increase. This increase leads to a growth in the income of the population, and as
                    a result, increase in their demand for various goods and services. This effect is called
                    induced  effect.  However,  since  the  cost-output  model  reflects  only  production
                    relations, this effect cannot be estimated with this model. In order to estimate this
                    effect,  the  SAM  multiplier  model,  which  contains  information  on  the  generation,
                    distribution and use of income along with production relations, was used, and the
                    results of this model are given in the fourth column of table 3. Note that the results of
                    this model retain most of the growth in the input-output model and additionally take
                    into account the induced effect.

                      Table 3: Multiplier effect of 1 million manat inverstment in Mining industry
                                                                     Change of    Change in total
                                                                   output based   demand based
                                                                   on IO model,      on SAM,
                          Sectors                                     manat           manat
                     1    Agriculture, forestry and fishing            0,19           113,97
                     2    Mining industry                             1079,15        1097,18
                     3    Production of food, drinks and tobacco       0,55           81,49
                     4    Production of non-metallic products and base
                          metals                                       25,52          128,01
                     5    Production of machinery, equipment, furniture   14,52       57,26
                     6    electricity, gas, steam                      3,19           32,43
                     7    Water supply                                 0,18            2,40
                     8    Waste management                             0,41            1,74
                     9    Construction                                 5,10           85,47
                     10  Trade and repair of transport uses            7,36           144,65
                     11  Transport and warehousing                     12,23          94,69
                     12  Accommodation and catering for tourists       0,72           30,48
                     13  Information and communication                 3,65           23,48
                     14  Financial intermediation, insurance and pension
                          services                                     4,55           24,67
                     15  Real estate services                          4,31           31,43
                     16  Research and development                      1,55            2,39
                     17  Professional and technical activities         10,82          29,97
                     18  Administrative and ancillary services         1,55            7,87
                     19  public administration and defense             0,20            0,49
                     20  Education                                     0,09           13,36
                     21  Healtcare                                     0,03            5,57
                     22  social services                               0,08           11,87
                     23  Services of library, archive, museum and other
                          cultural institutions                        0,00            0,75
                     24  Rest, entertaiment, art services              0,03            7,96
                     25  Other services                                1,23           19,04
                          Total                                       1177,22        2048,58


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