Mechanisms of Export Diversification in Resource-Rich Economies: An Empirical Analysis of Azerbaijan’s Non-Oil Sector
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Shafa Tiflis ALIYEV UNEC Centre for Karabakh Economic Research Sumgait State University, Sumgait, Azerbaijan, Azerbaijan State University of Economics (UNEC), Baku, Azerbaijan, Western Caspian University, Baku, Azerbaijan
This study examines the mechanisms of export diversification in Azerbaijan’s non-oil sector within the broader context of resource-rich economies and global economic transformation. It analyses Azerbaijan’s continuing dependence on oil and gas exports and evaluates the factors shaping the expansion of non-oil export capacity. The study combines comparative analysis, synthesis, systematisation, generalisation, statistical evaluation, correlation and simple regression analysis. The empirical component tests the relationship between selected policy and structural variables, including credit investments and technological innovation expenditure, and non-oil export performance. The findings show that Azerbaijan has made progress in developing non-oil sectors, industrial parks, logistics infrastructure, and post-conflict economic regions.
However, the export structure remains highly concentrated in mineral fuels and related products. The analysis also indicates that credit expansion and innovation-related expenditures have not yet generated sufficient structural change in export composition. Weak innovation capacity, limited high-technology production, insufficient investment in non-oil industries, and underdeveloped export-oriented manufacturing continue to constrain diversification.
The study highlights the potential role of the Alat Free Economic Zone, the Middle Corridor, the Zangazur transport corridor, and the liberated territories in strengthening non-oil export capacity. The paper concludes that Azerbaijan needs a more coherent export diversification strategy based on innovation, industrial clusters, import substitution, green energy, and targeted state support.
Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Article’s History: Received 15th of April, 2026; Revised 19th of May, 2026; Accepted 22nd of June, 2026; Available online: 30th of June, 2026. Published as research article in the Volume XXI, Summer, Issue 3(93), 2026.
Aliyev, S. T., Shakaralieva, Z. A., & Babaeva Shapiulakhovna, Z. S. (2026). Mechanisms of Export Diversification in Resource-Rich Economies: An Empirical Analysis of Azerbaijan’s Non-Oil Sector. Journal of Applied Economic Sciences, Volume XXI, Summer, 3(93), 751- 775. https://doi.org/10.57017/jaes.v21.3(93).04
Conflict of Interest Statement: The authors declare no conflicts of interest.
Funding Statement: The authors declare that no specific funding was received for this study.
Use of AI and AI-Assisted Technologies: During the preparation of this formatted manuscript, AI-assisted tools were used for language editing and formatting support. The authors reviewed and edited the content as needed and take full responsibility for the content of the publication.
Data Availability Statement: The data supporting this study are publicly available from the State Statistical Committee of the Republic of Azerbaijan and the Central Bank of the Republic of Azerbaijan. Source URLs are indicated in the tables and figures.
Ethical Approval Statement: Not applicable. This study uses publicly available secondary statistical data and does not involve human participants or identifiable personal data.
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