Protectionism and non-resource economic growth: Evidence from Azerbaijan

  • Received August 26, 2020;
    Accepted November 6, 2020;
    Published November 23, 2020
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  • Article Info
    Volume 18 2020, Issue #4, pp. 121-129
  • Cited by
    8 articles

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This work is licensed under a Creative Commons Attribution 4.0 International License

In the modern world, many developing countries take protective measures to develop domestic industries and diversify their economies to ensure economic sustainability. This issue is a priority, especially in those countries where economic development is provided mainly through the export of natural resources. This article aims to assess the impact of protectionist measures on the development of non-resource sectors of the economy. The object of the study is the non-oil sector of the Azerbaijani economy, where oil revenues account for over 80% of the country’s total exports. The study covers the 2005–2019 years. Granger Causality test in the VAR environment was used to identify and assess the causal relationship between protectionist measures and the non-oil sector development. It was revealed that such indicators as “customs revenues” and “exchange rate” do not increase non-oil GDP. The study results suggest that increasing the effectiveness of protectionism (in terms of economic growth) requires more reasonable and consistent regulatory measures. Targeting priority sectors and establishing monitoring mechanisms on the results of protectionist measures is also a priority for assessing their feasibility.

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    • Figure 1. Dynamics of Azerbaijan’s quarterly foreign trade surplus and oil exports (2000–2019, in USD million)
    • Figure 2. Dynamics of quarterly non-oil export and non-oil import in Azerbaijan (2000–2019, in USD million)
    • Таble 1. Johansen cointegration rank test (maximum Eigenvalue)
    • Table 2. Autocorrelation in the residuals
    • Table 3. The results of the Granger causality test
    • Conceptualization
      İlgar Seyfullayev
    • Data curation
      İlgar Seyfullayev
    • Formal Analysis
      İlgar Seyfullayev
    • Funding acquisition
      İlgar Seyfullayev
    • Investigation
      İlgar Seyfullayev
    • Methodology
      İlgar Seyfullayev
    • Project administration
      İlgar Seyfullayev
    • Resources
      İlgar Seyfullayev
    • Software
      İlgar Seyfullayev
    • Supervision
      İlgar Seyfullayev
    • Validation
      İlgar Seyfullayev
    • Visualization
      İlgar Seyfullayev
    • Writing – original draft
      İlgar Seyfullayev
    • Writing – review & editing
      İlgar Seyfullayev