Page 45 - Azerbaijan State University of Economics
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THE                      JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.80, # 2, 2023, pp. 28-46

                    CONCLUSIONS
                    In the article, the multiplier effects of the country's mining industry and manufacturing
                    industry were evaluated using the input-output model and the SAM-based multiplier
                    model of the Azerbaijani economy. During the research, the manufacturing industry
                    was divided into ‘Production of food, drinks and tobacco’, ‘production of non-metallic
                    products and base metals’ and ‘production of machinery, equipment and furniture’
                    groups.

                    In the article, the demand created by the creation of an additional demand of 1 million
                    manats for the products of each of these areas in these areas themselves, in other areas
                    and in the country as a whole was evaluated. We can summarize the multipliers for
                    the results of both models in the table below:

                     İndustries                                          Input-output       SAM
                                                                           multiplier     multiplier
                     Mining industry                                          1.18           2.05
                     Production of food, drinks and tobacco                   2.29           2.18
                     Production  of  non-metallic  products  and  base        1.89           1.62
                     metals
                     Production of machinery, equipment and furniture         2.08           1.33

                    As it can be seen, the investment of 1 million manats in the mining sector creates a
                    demand of only 1.18 million manats due to production relations, which is due to the
                    weak relations of this sector with other areas of the country's economy. However, the
                    SAM-based model, showing the results of the increase in value added, shows that this
                    increase in demand increases the total demand for the country by 2.05 million manats.
                    Part of this increase was caused by another indirect way, that is, the transfer of a part
                    of the revenues from the export of crude oil and gas in the mining industry to the state
                    budget through the OF, and these expenses affected the increase in demand in other
                    areas. Looking at the groups of the manufacturing industry, a high io multiplier is
                    observed due to the connection of this sector with other areas of economic activity.
                    However, in the SAM-based model, we see that this effect is reduced, which can be
                    explained by the fact that the resulting effect disappears due to the fact that imports
                    exceed  exports  and  the  value  added  rate  is  low.  It  seems  that  this  problem  is
                    particularly deep in the field of production of machinery, equipment and furniture,
                    which is related to the mentioned factors.

                    REFERENCES
                    Amin,  V.C.,  2002.  Analysis  of  the  results  of  measures  implemented  for  the
                           development  of  the  non-oil  industry  in  Azerbaijan.  Journal  of  Baku
                           Engineering University, 6(2), p.139.


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