Mechanisms of Export Diversification in Resource-Rich Economies: An Empirical Analysis of Azerbaijan’s Non-Oil Sector

Creative Commons License

Şəkərəliyeva Z., Şəkərəliyev A.

JOURNAL OF APPLIED ECONOMIC SCIENCES, vol.21, no.3(93), pp.751-775, 2026 (Scopus)

Abstract

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 hightechnology 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.