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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