The main goal of this study is to study the export-based growth model in Azerbaijan. For this purpose, the effect of export on growth based on quarterly data covering the years 2001-2023 was tested with vector error correction model and causality test.

A significant part of the energy resources exported by Azerbaijan, which has hydrocarbon reserves, is directed to non-CIS countries, and a significant part of non-resource products is directed to the CIS markets. In this study, the current status of the hypothesis of "Export-driven growth model" is investigated by conducting a Granger causality test based on VECM between the mentioned markets and economic growth.

In order to carry out the analyzes mentioned in the study, variables indicating the volume of industrial production of Azerbaijan, along with GDP, export to CIS countries and import from those countries, as well as export to non-CIS countries and import from those countries, were used. According to the findings of the research, the results obtained are as follows: Ⅰ) Johansen cointegration test was performed between the variables and a long-term relationship was found. Ⅱ) According to the Granger causality test based on VECM among the variables, bilateral causality was found between exports to non-CIS countries and GDP. Although no causality was found from exports to CIS countries to GDP, it was determined that there was a causal relationship from GDP to exports to CIS countries. According to the results of both tests, the Export-led growth hypothesis was accepted in the case of exports to non-CIS markets, but rejected in the case of CIS countries.

DOI:10.30546/2790-2196.1.10.2024.003.