Production Linkages and Employment Effects of the Petroleum Windfalls: An Input-output Analysis of Azerbaijani Economy

Elkhan Richard Sadik-Zada, Wilhelm Loewenstein and Y. Hasanli
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Elkhan Richard Sadik-Zada: Institute of Development Research and Development Policy, Ruhr-Universit t Bochum, Germany
Wilhelm Loewenstein: South African-German Centre for Development Research, University of the Western-Cape, South Africa
Y. Hasanli: Scientific Research Institute of Economic Studies, UNEC, Azerbaijan,
Authors registered in the RePEc Author Service: Wilhelm Löwenstein

International Journal of Economics and Financial Issues, 2019, vol. 9, issue 1, 225-233

Abstract: In this paper, we address the production linkages and employment effects of the petroleum sector on the rest of the Azerbaijani economy. We employ an input-output (IO) analysis. The availability of the IO tables for the years 2006, 2008 and 2009 enables the assessment of the changes with regards to the multiplier effects of the extractive industries over the first 3 years of the oil boom. We find that despite advanced infrastructure, well-developed petrochemical complex and local content policies the degree of integration of the international oil and gas business into the domestic economy is rather weak. In addition, both production and job creation multipliers slightly decreased after 3 years of exponential growth rates of oil production. The assessment of the production multipliers indicates that additional investments in processing, construction and network industries have the highest production linkages. Concerning employment multipliers agriculture, education, health care and public sector have the greatest job creation multipliers.

Keywords: Input-output Analysis; Direct Linkages; Employment Effects; Enclave Industry; Azerbaijan (search for similar items in EconPapers)
JEL-codes: C67 D24 D58 P22 Q32 Q33 Q38 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2019-01-28

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