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

                    From the results, we can see that an additional demand of 144,000 manats was created
                    for ‘Trade and repair of transport uses’, 128 thousand manats for ‘Production of non-
                    metallic products and base metals’, and 114 thousand manats for ‘Agriculture, forestry
                    and fishing’. In general, although the indirect effects on the production of other sectors
                    are small, due to low level of connection of mining sector with others, the increase in
                    the value added of this sector greatly boosts the development of the country's economy
                    through the induced effect. In the research, then we evaluated the multiplier effects of
                    the additional demand for the products of the ‘Production of food, drinks and tobacco’
                    sector. Table 4 shows the results of this assessment. It can be seen from the table that
                    the  creation  of  an  additional  demand  of  1  million  manats  for  the  product  of  the
                    ‘Production of food, drinks and tobacco’ sector creates a total demand of 2.3 million
                    manats due to production relations.

                    1.2 million manats of this demand is in this sector itself. Among other fields, the
                    highest value of increased demand is in ‘Trade and repair of transport uses’ with 261
                    thousand manats, the second highest value is in ‘Agriculture, forestry and fishing’
                    with  176  thousand  manats,  and  the  third  highest  value  is  in  ‘Production  of  non-
                    metallic products and base metals’, which can be explained by the use of trade services
                    and agricultural and non-metallic products as intermediate products in the ‘Production
                    of food, drinks and tobacco sector’. As it can be seen, there has been an increase in
                    other  sectors  to  some  degree,  too.  The  lowest  rates  of  growth  were  observed  in
                    services such as ‘Services of library, archive, museum and other cultural institutions’,
                    ‘Education’, ‘Healthcare’, ‘Rest, entertainment and art services’, ‘Social services’ and
                    ‘Public administration and defense’, because ‘and shows that these services are used
                    very little in the organization of production of food, drinks and tobacco products.

                    In the SAM-based multiplier model, since we can estimate the effects of growth in
                    value  added  along  with  intermediate  consumption  relationships,  our  expectation
                    would be that the results of the second model would exceed the results of the first
                    model, as in the case of the mining industry. However, contrary to this expectation,
                    according  to  the  SAM-based  multiplier  model,  the  effects  of  investments  in  the
                    ‘Production of food, drinks and tobacco’ are lower, with the value of 2.18 million
                    manats. The reason for this is that, in addition to taking into account value added
                    effects, the SAM-based model also takes into account import and export relations.
                    Thus, the total demand for goods and services in each sector is met by local production
                    and imports, and we face the situation of losing a part of the effects caused by the fact
                    that most of the demand for the products of this sector is imported.





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