Page 41 - Azerbaijan State University of Economics
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THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.80, # 2, 2023, pp. 28-46
The use of more imported products as intermediate products in the production of this
sector also plays a role in obtaining this result. On the other hand, since the level of
value added, including profit, wages in agriculture is low, these factors can increase
the demand for products of other sectors at a low level. As a result, the multiplicative
effects of expenditures on the basis of SAM in the agriculture are lower than the
multiplicative effects based on the input-output model. In Table 5, the multiplicative
effects of the creation of an additional demand of 1 million manats for the products of
the ‘Production of non-metallic products and base metals’ sector have been evaluated
for the country. As can be seen, according to the results of the input-output model, the
investment of 1 million manats in this sector increases the total output of the country
by 1.9 million manats due to production relations. 1.26 million manats of this increase
is in this sector itself, and the rest is in other sectors. The 2nd sector with the highest
impact is ‘Mining industry’. Thus, the investment of 1 million manats in the
‘Production of non-metallic products and base metals’ creates an additional demand
of 248 thousand manats for ‘Mining industry’ products across the country.
This is due to the fact that the products of that field are used as intermediate products
in the production of non-metallic products and base metals and in the production of
other sectors from which it receives its intermediate products. The lowest price of
impact was recorded in areas such as ‘Education’, ‘Healthcare’, ‘Services of library,
archive, museum and other cultural institutions’, ‘Social services’, ‘Rest,
entertainment, art services’, ‘Public administration and defense’, and the additional
demand in these areas is less than 500 manats. Looking at the SAM-based multiplier
model, we can see that for this sector also the result of this model is lower than the
result of the io model (1.6 million manats). The reason for this is that this sector is
highly dependent on imports.
Thus, the creation of an additional demand of 1 million manats for non-metallic
products and base metals requires an increase of 1.3 million manats in the output of
this field due to production relations. However, the result of the SAM-based model
shows that this increase is 1.1 million manats. This means that the corresponding
demand for the part that arose as a difference was due to the fact that imports exceeded
exports and the value added rate was at a low level. For comparison, let's note that the
rate of value added in the ‘Mining’ sector is 0.87, while in the Production of non-
metallic products and base metals' sector it is 0.4.
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