Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/197022 
Year of Publication: 
2017
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 5 [Issue:] 2 [Publisher:] MDPI [Place:] Basel [Year:] 2017 [Pages:] 1-20
Publisher: 
MDPI, Basel
Abstract: 
To help explain the common failure of oil or other natural resource exporting countries to diversify into industry, it has been common to trace this failure to real exchange rate appreciation. This has also been done in Azerbaijan. However, because Azerbaijan has devoted so much of its oil revenues to government investment, Azerbaijan provides a suitable case for examining an alternative link through government investment. This study applies the ARDL cointegration method to quarterly time series data on oil prices, government capital formation, non-oil exports and non-oil GDP to estimate the long run relationships linking oil prices to government investment expenditures and further to generation of non-oil GDP. The results show that despite the massive government investment expenditures, extremely little non-oil production of the tradable type has been generated, calling attention to the need for policy reform.
Subjects: 
oil windfall gains
government capital expenditures
non-oil diversification
industrial policy
sovereign wealth funds
Azerbaijan
JEL: 
Q01
Q32
Q43
H54
L52
O23
O25
O53
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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