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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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