Investment and loaning in Azerbaijan agriculture

Sugra I. Humbatova1,2,3 and Natig G-O. Hajiyev 3,4
1 Azerbaijan State University of Economics (UNEC), International Center for Graduate Education, Department of Economics and Management, AZ-1001 Baku, Azerbaijan
2 Baku Engineering University (BEU), Department of World Economy, AZ-0101 Khirdalan, Absheron, Azerbaijan
3 Ministry of Agriculture of Azerbaijan, Center for Agrarian Research, AZ-1016 Baku, Azerbaijan
4 Azerbaijan State University of Economics (UNEC), Department Regulation of Economy, AZ-1001 Baku, Azerbaijan


Humbatova, S. I. & Hajiyev, N. G-O. (2020). Investment and loaning in Azerbaijan agriculture. Bulg. J. Agric. Sci., 26 (6), 1116–1128

Since agruculture financing and lending are getting quite outstanding in the world, Azerbaijan is also taking serious steps towards it, as agricuture is one of the main branches of the state policy. Obviously, the development of agriculture has heavily tied with food security, environmental protection, eradicating extreme poverty, water purity, land consolidation etc. However, agriculture financinghas the potential to be resolved in Azerbaijan. Fortunately, government provides financial support to agriculture through investments and loans thatmay positively affect the financial sustainability of farmers and their competitiveness. The article analyzes the impact of public investment, renewal of fixed assets, credit allocations by banks for the development of agriculture by means of Autoregressive Distributed Lag (ARDL) modeling. Firstly, the stationary of series was checked, cointegration test was done based on ARDL–pounds testing and then, established models with diagnostic tests. As a result of analysis, a long-term cointegration was identified among agrarian GDP and investment, agrarian funds and agrarian credits. Also, a long-term cointegration was identified among gross agarian products and agrarian investment, agrarian funds as well as agrarian credits. Research reveals that investment on agriculture positively influences GDP, plant-growing and husbandry. However, the more credits are allocated for agriculture the less the outcomes for plant-growing and husbandry will decrease. The result is unexpected – actually, the unexpected result of credits to agriculture in Azerbaijan means uncertain influence on economic develeopment.

Keywords: agriculture financing; investments; loans; economic develeopment

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