<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Azerbaijan has an oil-led economy, which according to the well-known resource curse and Dutch disease hypotheses decreases the role of non-oil tradable sectors. Nevertheless, the government has actively fostered the growth of non-oil tradable sectors as the export orientation of Azerbaijan is being leveraged by the recently adopted economic policies. However, performance evaluations at the subsectoral level remain rare. The present paper evaluates the performance of the fruit and vegetable subsectors in Azerbaijan from 1995 to 2020 based on multiple key indicators, such as production, profitability, and productivity via principle component analysis (PCA). The purpose of the study was to provide a comparison of two key subsectors in Azerbaijan that are strong candidates for non-oil tradable exports. The results revealed that the vegetable subsector outperformed the fruit subsector in terms of production and profitability from 1999 to 2014; however, it experienced a sharp decline from 2014 to 2015 (the period of the rapid commodity price downturns), which gives rise to the question of whether the extractive industry negatively affected the subsector. Compared to the vegetable subsector, production and profitability in the fruit subsector demonstrated a more stable upward trend. In addition, labor input in both sub-sectors decreased over time, indicating efficiency gains via new technology transfers and productivity enhancements. Ordinary Least Squares (OLS) results demonstrated a strong and statistically significant negative relationship between the performance of the vegetable subsector with the oil revenue boom period (2008–2015).</p>
</abstract>

Azerbaijan has an oil-led economy, which according to the well-known resource curse and Dutch disease hypotheses decreases the role of non-oil tradable sectors. Nevertheless, the government has actively fostered the growth of non-oil tradable sectors as the export orientation of Azerbaijan is being leveraged by the recently adopted economic policies. However, performance evaluations at the subsectoral level remain rare. The present paper evaluates the performance of the fruit and vegetable subsectors in Azerbaijan from 1995 to 2020 based on multiple key indicators, such as production, profitability, and productivity via principle component analysis (PCA). The purpose of the study was to provide a comparison of two key subsectors in Azerbaijan that are strong candidates for non-oil tradable exports. The results revealed that the vegetable subsector outperformed the fruit subsector in terms of production and profitability from 1999 to 2014; however, it experienced a sharp decline from 2014 to 2015 (the period of the rapid commodity price downturns), which gives rise to the question of whether the extractive industry negatively affected the subsector. Compared to the vegetable subsector, production and profitability in the fruit subsector demonstrated a more stable upward trend. In addition, labor input in both sub-sectors decreased over time, indicating efficiency gains via new technology transfers and productivity enhancements. Ordinary Least Squares (OLS) results demonstrated a strong and statistically significant negative relationship between the performance of the vegetable subsector with the oil revenue boom period (2008–2015).

Performance Evaluation of the Fruit and Vegetable Subsectors in the Azerbaijani Economy: a Combinatorial Analysis Using Regression and Principal Component Analysis

PhD candidate at the University of Szeged

Zagreb International Review of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Azerbaijan has an oil-led economy, which according to the well-known resource curse and Dutch disease hypotheses decreases the role of non-oil tradable...

Performance Evaluation of the Fruit and Vegetable Subsectors in the Azerbaijani Economy: a Combinatorial Analysis Using Regression and Principal Component Analysis

Published Online: Feb 12, 2022

Page range: 27 - 47

DOI: https://doi.org/10.2478/zireb-2021-0018

Keywords
Azerbaijan economy, agriculture, subsectoral performance, vegetable production, fruit production

© 2021 Ibrahim Niftiyev, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Performance Evaluation of the Fruit and Vegetable Subsectors in the Azerbaijani Economy: a Combinatorial Analysis Using Regression and Principal Component Analysis

Published Online: Feb 12, 2022

Page range: 27 - 47

DOI: https://doi.org/10.2478/zireb-2021-0018

KeywordsAzerbaijan economy, agriculture, subsectoral performance, vegetable production, fruit production

© 2021 Ibrahim Niftiyev, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
Azerbaijan economy, agriculture, subsectoral performance, vegetable production, fruit production