Granger causality analysis of foreign trade ımpact on economic growth and some socioeconomic indicators: Case of Azerbaijan

Creative Commons License

Mayis G. G., Shahin B. V., Shafa G. T., Yegana A. J., Mehpare O. S.

WSEAS Transactions on Business and Economics, vol.18, pp.276-283, 2021 (Scopus) identifier

  • Publication Type: Article / Article
  • Volume: 18
  • Publication Date: 2021
  • Doi Number: 10.37394/23207.2021.18.28
  • Journal Name: WSEAS Transactions on Business and Economics
  • Journal Indexes: Scopus, EconLit, INSPEC
  • Page Numbers: pp.276-283
  • Keywords: Export, Foreign trade, Foreign trade openness, GDP, Granger causality, Household income, Import, Liberalization, Trade balance, Trade freedom
  • Azerbaijan State University of Economics (UNEC) Affiliated: Yes

Abstract

The main purpose of the investigation is to define the existence of the causality relationship between foreign trade and some macroeconomic indicators in Azerbaijan. There was used OLS and cointegration methods, as well as Granger causality between these indicators. The main conclusion is that there is not a causality effect between import and GDP. As well as there is a causality effect between GDP and export. But there is not a strong causality effect between foreign trade openness, foreign trade freedom, and GDP. As well as the paper investigates the impact of import, export, and their annual changing on household income. For this purpose, the Dickey-Fuller test and Granger causality tests were applied. The authors come to the conclusion that there is no causal relationship between foreign trade indicators and poverty rate, but there is such a relationship between foreign trade indicators and household income.