Impact of investment on GDP and non-oil GDP in Azerbaijan

Abstract

The causal relationship among, investment and growth is mixed and controversial both the oretically and empirically. There is large empirical literature which examines the investment-growth nexus. This paper examines the causal relationship among, investment and economic growth in Azerbaijan using months’ time series data from 2010-2019. Results for Augmented Dickey‒Fuller (ADF), Phillips−Perron (PP) and Kwiatkowski−Phillips−Schmidt−Shin (KPSS) unit root tests show that all variables under consideration are I(1). Result from the Auto Regressive Distributed Lag Bounds Testing (ARDLBT) indicates that there exists cointegration among gross domestic investment, gross domestic product. İnvestment have significant positive effect on economic growth of Azerbaijan both in the short-run and in the long-run.