IMPACTS OF EXPORT SUBSIDIES ON NON-OIL EXPORTS – EVIDENCE FROM AZERBAIJAN

Ramil Huseyn, Namig Shalbuzov and Coshgun Cafarov

Regional and Sectoral Economic Studies, 2024, vol. 24, issue 2, 99-118

Abstract: Azerbaijan’s exports consist primarily of oil and oil products, with non-oil exports accounting for an average of only 11.5 percent of total exports over the last five years (2016-2020). This paper investigates the impact of export subsidies on export growth in the non-oil sector, as well as revenues of exporters in the case of Azerbaijan. Six criteria of OECD/DAC have been used for evaluation. A linear regression model was built to assess the impact of subsidies on non-oil export growth and variance analysis was performed to obtain a complete result. The findings of the analysis reveal that: (1) subsidies did not play a significant role in export growth; (2) stopping the subsidy after 2020 was the right decision; (3) production support measures instead of export subsidies are more effective. The combination of two different approaches shows that increasing competitiveness, rather than subsidies, has contributed significantly to raise the level of export income. Classification-JEL: O0, O1, O2

Keywords: Azerbaijan; export promotion; export subsidy; income; non-oil sector (search for similar items in EconPapers)
Date: 2024
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