SCIENTIFIC REVIEWS OF THE AZERBAIJAN STATE UNIVERSITY OF ECONOMICS
Scientific Reviews of the Azerbaijan State University of Economics (UNEC) is a peer-reviewed academic journal serving researchers, doctoral candidates, and professionals in economics and related social sciences. Published quarterly in Azerbaijani, English, and Russian, it covers economics, sociology, and public policy. The journal is included in the official list of scientific publications recommended by the Higher Attestation Commission of the Republic of Azerbaijan for publishing the main results of dissertations.
COMPARATIVE ANALYSIS OF THE CONCEPTS OF INCOME ACCOUNTING ACCORRDING TO DIFFERENT ECONOMIC SCHOOLS
The purpose of the study- to analyze the concepts of income of different economic schools and to comparatively examine the form of their reflection in accounting. This is important for better adaptation of accounting reports to economic reality and increasing the accuracy of auditors' decision-making. Research methodology- the process of income recognition in accounting; the subject is IFRS 15 standards; methodological basis - comparative analysis, application of theories and analysis on practical examples. This study has theoretical and applied significance for practicing accountants, auditors and scientists working in the field of economics. Different economic schools have created conceptual approaches to income recognition in accounting by explaining the concept of income on different theoretical bases, and these theoretical approaches have had a multifaceted impact on the principles of income recognition, measurement and presentation in accounting. As a result of the synthesis of these impacts, the modern accounting system has been formed as a complex concept that perceives income as both an increase in economic benefit and reliable and comparable financial information within the framework of legal and regulatory requirements. Correct recognition of income affects the quality of accounting reports, investor decisions and tax determination. The conceptual approaches of various economic schools to the concept of income were systematically and comparatively analyzed from the perspective of accounting, and the theoretical differences between the classical, neoclassical, Keynesian and institutional schools, as well as the modern IFRS 15 standard, were summarized by linking them with the mechanisms for recognizing and presenting income. As a result, the sources of formation and theoretical foundations of the income concept applied in modern accounting were scientifically substantiated, and a new approach was put forward.
production factors, neoclassical economic approach, keynesianism, income theory, classical economic approaches.
Copyright (c) 2026 Agshin Khudiyev (Author) https://creativecommons.org/licenses/by/4.0/
BEYOND TRANSIT: STRATEGIES FOR TRANSFORMING AZERBAIJAN INTO A REGIONAL LOGISTICS HUB
This study explores how Azerbaijan can move beyond a transit-based role and enhance domestic economic value through a logistics-oriented hub model. Despite remarkable growth in transit freight volumes and strengthened regional connectivity, the economic benefits generated within the national economy remain limited. The main objective of the research is to identify practical pathways for transforming transit connectivity into value-added logistics outcomes. The paper applies a qualitative and analytical research approach based on existing data from official national sources, including transport and customs statistics, academic literature, and international reports. A comparative perspective is employed to examine Azerbaijan’s logistics practices in relation to selected international experiences such as Singapore, Rotterdam, and Jebel Ali. The analysis is structured around a conceptual framework integrating transit connectivity, logistics upgrading, and value creation. The research addresses key questions concerning why transit growth does not by itself result in greater domestic value and which logistics functions are critical for enhancing value capture. The results emphasize the importance of corridor-based logistics hubs, multimodal coordination, inland terminals, customs digitalization, cargo consolidation, value-added logistics services, aviation logistics specialization, and stronger private sector participation for deeper integration of transport flows within the domestic economy. This investigation contributes to the academic literature on transit-based economies and offers policy-relevant insights for Azerbaijan and other emerging transit countries.
transit-based economy, logistics-oriented hub model, regional connectivity, value creation, regional logistics hub.
Copyright (c) 2026 Aybeniz Hashimli (Author) https://creativecommons.org/licenses/by/4.0/
ECONOMETRIC ANALYSIS OF THE IMPACT OF THE NON-OIL SECTOR, INVESTMENT FLOWS AND TRADE TURNOVER ON REAL GDP (1995–2024)
The article investigates the impact of the non-oil sector, investment flows, and foreign trade turnover on real GDP growth in the Azerbaijani economy during the period of 1995-2024 using econometric methods. The relevance of the research stems from the necessity to reduce the economy's dependence on oil and to evaluate the effectiveness of the diversification strategy. In the study, the stationarity levels of the variables were tested using ADF and KPSS tests, which determined that they are integrated at mixed levels of I(0) and I(1). Therefore, the ARDL Bounds Testing approach was applied to determine the long-term relationship between the variables. The results of the econometric analysis show that there is a statistically significant long-term cointegration relationship between the studied variables at a 5% significance level. According to the results of the long-term model, the highest positive impact on real GDP is exerted by trade turnover (0.847). It has also been confirmed that investment flows (0.462) and the non-oil sector (0.319) make significant contributions to economic growth. Through the Error Correction Model (ECM), it was determined that after short-term shocks, the system returns to its long-term equilibrium at a rate of approximately 20.3% each year. The Granger causality test revealed a unidirectional relationship from the non-oil sector to real GDP. The results of the research prove that non-oil-oriented investments and trade liberalization are crucial for sustainable economic growth.
real GDP, non-oil sector, investments, trade turnover, ARDL, cointegration, Azerbaijan economy.
Copyright (c) 2026 Habib Habibi (Author) https://creativecommons.org/licenses/by/4.0/
COMPARATIVE ANALYSIS OF INTERNATIONAL EXPERIENCE AND THE AZERBAIJAN MODEL IN BANK RESTRUCTURING
The main objective of the research is to systematically assess the financial stability of the Azerbaijani banking sector in the context of global financial crises and to explore the applicability of international bank restructuring mechanisms within a national context. The study clarifies conceptual distinctions between "bail-out", "bail-in", "resolution", and "restructuring", and draws on comparative analysis of the US TARP programme, the EU Bank Recovery and Resolution Directive (BRRD), and South Korea's post-1997 model. Key quantitative indicators for the Azerbaijani banking sector — including the NPL ratio, capital adequacy ratio (CAR), credit growth dynamics, and the HHI concentration index — are tracked over the 2014–2023 period to provide an empirically grounded assessment of structural change. The practical significance of the research lies in the formulation of concrete policy recommendations addressing the need for early-stage macroprudential intervention, stronger legal underpinning of resolution frameworks, and the preservation of competitive conditions in the banking sector.
bank restructuring, financial stability, prudential regulation, resolution mechanisms, NPL, capital adequacy, Azerbaijan banking system.
Copyright (c) 2026 Sahil Murtuzayev (Author) https://creativecommons.org/licenses/by/4.0/
AN EMPIRICAL ASSESSMENT OF THE PERMANENT INCOME HYPOTHESIS IN AZERBAIJAN’S RESOURCE-RICH ECONOMY (2005-2024)
This study empirically investigates the validity of the Permanent Income Hypothesis (PIH) and the Keynesian Consumption Paradigm in Azerbaijan’s resource-rich economy for the period 2005–2024. Utilizing a Robust OLS regression framework, the research examines the structural dependence of private consumption on volatile oil revenues and household savings. It addresses a critical gap in macroeconomic literature by analyzing how transitory oil wealth shocks are moderated by precautionary saving motives in a post-Soviet context. Empirical findings reveal a significant “wealth stabilization effect,” suggesting that household savings act as a critical buffer against external income shocks. Specifically, the estimated elasticity for oil revenues and bank deposits indicates that Azerbaijani households maintain relatively stable consumption patterns despite commodity price volatility. This lower marginal propensity to consume out of transitory oil wealth provides strong theoretical support for Friedman’s PIH. The results highlight that in resource-dependent emerging markets, the interplay between financial depth and consumption smoothing is pivotal. These insights offer valuable implications for fiscal and monetary policy, emphasizing financial mechanisms that incentivize long-term savings to maintain macroeconomic equilibrium and sustainable economic prosperity.
private consumption, household savings, oil revenues, macroeconomic equilibrium, resource dependency, OLS Regression.
Copyright (c) 2026 Lala Valiyeva (Author) https://creativecommons.org/licenses/by/4.0/
PRIOR DIRECTIONS OF INVESTIGATING THE SOCIAL CONTENTS OF STABLE GROWTH AND THE TASKSOF ECONOMIC THEORY
The purpose of the study is examining those new particularities of social character that influence on the stable contemporary economic growth and also can be seen in the process of re-integration of Karabakh and Eastern Zangazur economic regions to single economic territory of the Republic of Azerbaijan. The study was conducted basing on such research methods as dialectical, concrete-historical, methods of systematic analysis and logical conclusion. The study’s limitations can be considered as a shortage of investigation of decisive influence of social priorities on providing the stable character of economic development including the problem of re-integration of Karabakh and Eastern Zangazur economic regions, that we can see in the majority of recent studies in economic theory. The result of the study is that there were analyzed new elements that appear in the process of contemporary economic development and demonstrate large increase of social component in providing the stable character of this development. The practical importance of the study is that it can be used in estimating the newly positive changes from the position of priority of social goals in the process of economic development of Azerbaijan that is necessary for improving the whole socio-economic policy of our state. The scientific novelty and originality of the study are in discovering possibilities of further strengthening of social contents of economic development of our country with a purpose of providing its larger stability and also the best ways of re-integration of Karabakh and Eastern Zangezur regions to single economic territory of the Republic of Azerbaijan.
social orientation of stable development, intellectual level of modern production, increasing the quality of life of population, social priorities of development of Karabakh and Eastern Zangazur economic regions.
Copyright (c) 2026 Aysel Guliyeva (Author) https://creativecommons.org/licenses/by/4.0/
THE ROLE OF SMALL AND MEDIUM ENTERPRISES IN THE ECONOMIC SYSTEM AND DEVELOPMENT PERSPECTIVES
In the modern world economy, small and medium-sized enterprises (SMEs) have become a driving force of economic dynamics in both developed and developing countries. This article, in the first stage, comparatively examines the SME policies of the European Union, the United States, China, South Korea, Japan, and Turkey, identifying distinct parameters of state support models. In the second stage, the current state of the SME sector in the Republic of Azerbaijan — including statistical indicators, the legal and regulatory framework, the activities of KOBİA (the Small and Medium Business Development Agency), and international financial support — is comprehensively analyzed. The research reveals that while the growth potential of Azerbaijan’s SME sector is high, limitations in access to finance, skills shortages, and digital adaptation problems require structural intervention. Based on a comparative analysis of foreign experience, policy recommendations are put forward.
Azerbaijan, small and medium entrepreneurship, foreign experience, state support, KOBİA (Azerbaijan's Small and Medium Business Development Agency), economic development, digital transformation.
Copyright (c) 2026 Vasif Ahadov, Jamal Hajiyev, Sayyar Huseynov (Author) https://creativecommons.org/licenses/by/4.0/
PRACTICAL PROBLEMS OF ORGANIZING FINANCIAL ACCOUNTING IN ENTERPRISES UNDER MODERN CONDITIONS
The article is devoted to examining the practical problems that arise in the organization of financial accounting in enterprises under modern conditions, particularly the impact of compliance requirements and technological innovations. The aim of the study is to identify the distinguishing features of tax and accounting standard compliance, the application of information technologies, and adherence to international reporting requirements in enterprises of different sizes. The influence of these factors on the competitiveness of enterprises and the efficiency of management is specifically analyzed. The scientific significance of the study lies in exploring the interaction between compliance mechanisms and technological innovations in enterprise management, thereby contributing new perspectives to the existing literature. Using a systematic approach, generalization, and comparative analysis methods, the article consistently examines the levels of compliance, opportunities for applying information technologies, and degrees of preparedness for international reporting among small, medium, and large enterprises. The research results show that as the type of enterprise changes, the level of compliance with tax and accounting standards also varies; the application of information technologies increases the efficiency of production, management, and reporting processes; and noticeable differences exist between small and large enterprises in terms of their capacity to meet international reporting requirements. The implementation of technological innovations enhances managerial performance, facilitates process optimization, and demonstrates that organizational structures, resource potential, and the level of digital readiness play a decisive role in shaping enterprises’ ability to adapt to local and international requirements. Overall, the analysis indicates that the broad application of technological innovations and adherence to compliance requirements are crucial for effective management, transparency, and increased competitiveness of enterprises.
enterprise, finance, accounting, innovation, management, control.
Copyright (c) 2026 Rauf Allahyarov (Author) https://creativecommons.org/licenses/by/4.0/
ARTIFICIAL INTELLIGENCE LITERACY AND ITS IMPACT ON THE WORK ENVIRONMENT: A STUDY OF THE NORTH-WEST REGION OF AZERBAIJAN
This research examines the integration of Artificial Intelligence (AI) into the professional environment and employees' attitudes toward these technologies in the North-West region of Azerbaijan. The study aims to determine the level of AI tool usage, its impact on work processes, and current approaches regarding occupational security. The research was conducted in February 2026 using a mixed-methods and descriptive design. Data were collected through face-to-face surveys from 47 participants representing various economic sectors. Quantitative data were analyzed using descriptive statistics, while open-ended responses were analyzed through inductive thematic analysis. The results indicate that the majority of respondents perceive AI as a tool that increases operational efficiency and work quality. However, there are certain concerns regarding job loss and long-term skill degradation. The study reveals that AI usage in the region develops primarily through individual initiative, and the level of institutional support varies across sectors. The findings emphasize the importance of organizational strategies and structural support for a more systematic and sustainable integration of AI.
artificial intelligence, AI literacy, work environment, productivity, digital transformation, North-West region.
Copyright (c) 2026 Jeyhun Rzayev, Ragif Gasimov (Author) https://creativecommons.org/licenses/by/4.0/
DEVELOPMENT OF THE NON-OIL SECTOR AND TRANSITION TO THE POST-OIL ERA
The purpose of the study is to comprehensively determine the role of the non-oil sector in the economic development of Azerbaijan, the economic and financial risks caused by oil dependence, as well as the main directions of the transition to the post-oil era. In this context, the issues of volatility in the global energy market, instability of oil prices, protection of economic stability and formation of long-term sustainable development strategies are kept in the spotlight. The research methods include a systematic and multidisciplinary analysis of economic policies, structural reforms and development indicators in various sectors based on statistical, comparative and empirical approaches. In this process, the development characteristics of agriculture, industry, tourism, ICT, transport-logistics and service sectors, their contribution to economic growth, as well as the role of improving the business environment, increasing investment attractiveness, human capital development and institutional reforms are comprehensively assessed. The practical significance of the research is related to the development of substantiated recommendations for determining effective economic strategies that ensure rapid and sustainable development of the non-oil sector, expanding export-oriented production, stimulating the socio-economic development of regions, and strengthening public-private sector cooperation.
non-oil sector, post-oil era, sustainable development, non-oil industry
Copyright (c) 2026 Umudvar Aliyev, Sevinc Huseynli (Author) https://creativecommons.org/licenses/by/4.0/
SOCIAL MEDIA RESPONSIVENESS AND INSTITUTIONAL REPUTATION IN HIGHER EDUCATION IN AZERBAIJAN:DOES THE TYPE OF RESPONSE MATTER?
The primary aim of the research is to explore the mediating role social media responsiveness plays in relationship between SMM and institutional reputation in higher education institutions of Azerbaijan. Specifically, the study examines whether public engagement strategy and digital trust serve as sequential mediating mechanisms. Method The research was based on a quasi-experimental design via an online survey among 412 public and private university students in Azerbaijan (cross-sectional). The data were analyzed with Partial Least Squares Structural Equation Modelling (PLS-SEM) with 5000 bootstrap resamples. Findings of the study reveal that social media responsiveness is not shown to have significant direct influence on institutional reputation. Nevertheless, a complete serial mediating effect was found for the following: social media responsiveness indirectly influence on CR through improvements in public engagement strategies (PES) and subsequently increasing digital trust ($\beta$ = 0.36, p < 0.001). The model accounts for $58\%$ of the variance in institution reputation. The findings have practical implications: namely, that universities ought not place all of their social media eggs in the basket of speed of response, but instead train staff to engage in authentic dialogue, show empathy and resolve issues effectively on social media. The originality of the study lies in that it extends Dynamic Capabilities Theory to Dialogic Public Relations cues, and points out digital trust as a critical serial mediator in an emerging countries context.
social media responsiveness, public engagement strategy, digital trust, institutional reputation, higher education
Copyright (c) 2026 Ahmed Hamdi Al-Adini (Author) https://creativecommons.org/licenses/by/4.0/
THE TRANSFORMATION OF THE LABOR MARKET IN THE PERIOD OF TECHNOLOGICAL DEVELOPMENT AND DIGITALIZATION
The rapid technological development and digitalization driven by the Fourth Industrial Revolution are causing fundamental transformations in global labor markets, creating both opportunities and significant challenges for national economies. The purpose of this research is to comprehensively analyze key processes such as job displacement, the formation of new skill requirements, and wage inequality, influenced by artificial intelligence and automation, within the context of global trends and the realities of Azerbaijan. The methodological basis of the study combines a conceptual synthesis of reports from international organizations (IMF, OECD, World Bank), modern academic literature, and Azerbaijan's strategic documents with an econometric regression analysis using the ordinary least squares method. This analysis measures the impact of higher education and information and communication technologies (ICT) on labor productivity, based on national data from 2005-2024. The findings indicate that the technological transformation has a dual nature. On one hand, it leads to workforce displacement by replacing routine tasks, and on the other, it enhances overall productivity by complementing human labor and creating new professions. The econometric model empirically confirms that both the level of higher education and investments in ICT have a statistically significant and positive impact on labor productivity in Azerbaijan. The results of the research hold practical significance for policymakers, educational institutions, and the private sector in preparing the labor market for new challenges, developing competitive human capital, and improving adaptive socio-economic policies.
labor market, artificial intelligence, digitalization, Fourth Industrial Revolution, job transformation
Copyright (c) 2026 Natig Seyfullazadeh (Author) https://creativecommons.org/licenses/by/4.0/
EXPLORING GRASSROOTS SOCIAL INNOVATION AND INFORMAL ENTREPRENEURSHIP IN THE MALDIVES: A SECONDARY CONCEPTUAL ANALYSIS FOR SIDS DEVELOPMENT POLICY
The Maldives is a Small Island Developing State (SIDS) that faces institutional capacity constraints, economic vulnerability, and geographic fragmentation. This study explores grassroots social innovation in the Maldives. It examines the emergence of community-led projects to address development issues in livelihoods, education, the environment, and technology access, motivated by necessity, thrift, and digital fluency. This research used a qualitative case study method to look at ten to twelve grassroots projects to analyze their diversity and relevance. The results demonstrate that grassroots social innovation in the Maldives are relatively informal, deeply established in the community, often led by women and young people, and impacted by digital tools and social trust. These programs fill in the gaps in how services are provided by using creativity and making social value as a sort of hybrid entrepreneurship. These projects are doing well even though the government doesn't officially support them. This is because people want to contribute, and the ideas are important to their culture. They must, however, balance formalization and autonomy, scale and local authenticity, and community priorities with outside funding. The research challenges traditional development frameworks that ignore bottom-up resilience and contributes to theoretical discussions on informal entrepreneurship and grassroots innovation in SIDS. To better localize the Sustainable Development Goals (SDGs), it advocates for policy support that integrates grassroots voices into national development planning, fortifies digital and social infrastructure, and legitimizes informal innovation ecosystems.
social innovation, intrepreneurship, grassroots innovation, sustainable development
Copyright (c) 2026 Hudhoodha Waheedh (Author) https://creativecommons.org/licenses/by/4.0/
A NORMATIVE–INSTITUTIONAL MODEL OF PUBLIC PARTICIPATION AND SUBSTANTIVE EFFECTIVENESS IN URBAN GOVERNANCE: THE CASE OF AZERBAIJAN
This study develops a theoretically integrated normative–institutional framework for analyzing the structure, functioning, and effectiveness of public participation mechanisms in urban governance in Azerbaijan. The article addresses a structural paradox observable in transitional governance systems: the existence of formal legal guarantees of participation does not automatically generate substantive influence over policy outcomes. The research adopts a qualitative normative–institutional analytical design grounded in legal text analysis and conceptual modeling. A three-level framework is constructed linking (1) normative legal foundations, (2) institutional practice and authority allocation, and (3) governance outcomes. Drawing upon deliberative democratic theory, participatory power redistribution models, institutional design scholarship, and post-centralized governance literature, participation effectiveness is conceptualized as a function of four interdependent structural variables: legal thickness (LT), real decision-making authority (RA), transparency and feedback regimes (TR), and social capital density (SC). The model assumes institutional complementarity, meaning that weakness in any single dimension constrains overall effectiveness. The analysis suggests that Azerbaijan possesses a relatively comprehensive legal architecture regulating citizen engagement, including constitutional provisions and sectoral legislation. However, fiscal centralization, limited binding force of consultative mechanisms, and uneven civic capacity may restrict the substantive depth of participation. The study integrates normative democratic theory with institutional political economy analysis and proposes a structured explanatory model applicable to post-centralized governance contexts. The framework provides a foundation for empirical operationalization, indicator-based assessment, and comparative regional research.
public participation; urban governance; institutional design; deliberative democracy; local self-government; governance effectiveness
Copyright (c) 2026 Rafail Rzayev, Elman Ibishov, Shamil Gafarov, Aliagha Gasimov (Author) https://creativecommons.org/licenses/by/4.0/
DIGITALIZATION AND E-GOVERNMENT INDEX: OVER VIEW OF CURRENT TENDENCIES
The study explores how readiness to adopt digital services translates into actual citizen usage, examining the disparities and challenges associated with the "digital divide". Conceptual approaches linking supply-side government efforts with demand-side citizen activity are summarized, justifying the importance of developing mature digital ecosystems to support complex online transactions. Using Spearman correlation over 96 countries (N=96), this study has tested the empirical relationship between e-government maturity (measured by the E-Government Development Index; EGDI) as well as its 3 main subcomponents (OSI, HCI, TII) and a number of different digitalization metrics. The results show that the EGDI and its three subcomponents all correlated positively and very highly with a variety of digital sophistication and high transactional use metrics in the conditions of rapid technological advancement. The study found positive correlations between service maturity (OSI), human capacity (HCI), and high-value digital transactions like online purchases and bill payments. Furthermore, it was determined that e-government success is closely associated with higher desktop-based web traffic and lower relative technology costs for citizens. The determination of empirical links between supply-side indices and demand-side usage variables provides a new perspective on national digital maturity beyond mere readiness. Taking into account the resource potential and technological trends across 96 nations, conceptual approaches to a mature digital model have been provided, and practical directions for policymakers to implement targeted strategies have been determined.
digitalization, E-Government Index, share of Android web traffic, share of iOS web traffic, mobile money
Copyright (c) 2026 Maral Jamalova (Author) https://creativecommons.org/licenses/by/4.0/
BLOCKCHAIN-BASED E-COMMERCE: APPLICATIONS AND CHALLENGES
The main purpose of the study is to investigate the application models of blockchain-based e-commerce and the issues related to its implementation challenges. This article examines how blockchain can address long-standing weaknesses in electronic commerce—payment disputes, chargebacks, fraud, and limited operational transparency—through a structured review of recent literature and practice. It answers two questions: (1) Which blockchain applications are relevant to e-commerce? (2) What challenges arise when integrating blockchain into this domain? Findings indicate that decentralized ledgers with immutable records and strong cryptography can raise transaction reliability, reduce dependence on intermediaries, and strengthen buyer–seller trust. High-value use cases include end-to-end supply-chain traceability, product provenance verification, reputation management, automated settlement via smart contracts, and faster, evidence-based dispute resolution. Yet adoption remains constrained by scalability and storage efficiency limits, privacy risks on public ledgers, the problem of validating data before it is written on-chain, smart-contract immutability and upgrade paths, upfront and ongoing costs, and immature standards and regulation—especially for SMEs. A pragmatic path forward is a hybrid architecture that combines public and permissioned chains, stores sensitive data off-chain while anchoring proofs on-chain, and uses fine-grained access control. Integration with IoT can deepen auditability across logistics flows. The article recommends measuring net value on real datasets (e.g., cost-to-serve, dispute cycle time, fraud incidence) and establishing clear governance and compliance frameworks. Overall, blockchain can serve as a “digital infrastructure of trust” for e-commerce, but its potential is realized only through phased deployment, sound governance, and regulatory alignment.
blockchain technology, electronic commerce (e-commerce), smart contracts
Copyright (c) 2026 Maharram Akbarov, Mubariz Abbaszadeh (Author) https://creativecommons.org/licenses/by/4.0/
NATURAL MONOPOLIES' ADAPTATION TO TECHNOLOGICAL CHANGES AND DIGITALIZATION
The main purpose of the study is to systematically analyze the impact of technological changes and digitalization on the functioning, economic efficiency, and regulatory mechanisms of natural monopolies. The article examines how digital platforms, automation, and data-driven management technologies transform the traditional dominant positions of natural monopolies and influence the competitive environment and institutional mechanisms. The research is based on theoretical analysis, a systemic approach, comparative historical analysis, and empirical observation methods. Using examples from the Swedish telecommunications sector and the utility and energy sectors of Azerbaijan, the dynamics of operational costs, service quality, and management efficiency resulting from the application of digital technologies are evaluated. The findings demonstrate that digitalization leads to a reduction in technical losses, shorter service delivery times, and increased flexibility of regulatory mechanisms. At the same time, digital management tools enhance the effectiveness of regulatory oversight and accelerate decision-making processes by increasing data transparency. The scientific novelty of the study lies in substantiating digitalization not only as a technological innovation but also as a tool of institutional transformation for natural monopolies. The practical significance of the research is related to identifying opportunities for improving decision-making processes for regulatory institutions and infrastructure sectors.
natural monopoly, digitalization, technological change, infrastructure, regulation.
Copyright (c) 2026 Galib Huseynov (Author) https://creativecommons.org/licenses/by/4.0/
ENERGY EFFICIENCY IN AGRICULTURAL VALUE CHAINS: PRIORITIZING INNOVATION NEEDS AND REVERSE LOGISTICS LINKAGES
Improving energy efficiency in agricultural value chains plays a crucial role in sustainable development. Identifying and prioritizing innovation needs for energy efficiency improvements, as well as implementing these priorities, including through reverse logistics linkages, have become an imperative. This article examines these issues. The purpose of the research is to determine the priority innovative needs for increasing energy efficiency, taking into account the possibilities of reverse logistics in the value chain of agricultural production. The methodological basis of the study is based on scientific abstraction, comparative analysis and synthesis, and logical generalization. If data are available for empirical evaluation, preference may be given to the MoSCoW, Kvakita Dziro, WSJF and Eisenhower box methods. The recommended approach can be used to strengthen the scientific basis for energy efficiency measures in agricultural value chains. The obtained results can be used to improve energy efficiency in agricultural value chains, prioritize innovation needs, and implement them through reverse logistics linkages. The resulting statements and proposals for reverse logistics opportunities will contribute to meeting innovation needs for energy efficiency improvements in agricultural value chains.
energy efficiency, value chains, innovation needs, priorities, reverse logistics, agricultural sector
Copyright (c) 2026 Emin Axmedzadeh (Author) https://creativecommons.org/licenses/by/4.0/
EMPIRICAL ASSESSMENT OF THE IMPACT OF THE NON-FINANCIAL SECTOR ON THE FINANCIAL SECTOR IN THE AZERBAIJANI ECONOMY BASED ON THE LEONTIEF INPUT–OUTPUT MODEL
This paper analyzes intersectoral linkages within the Azerbaijani economy and examines the impact of the non-financial sector on the financial sector through price and value-added transmission channels. Using the Leontief input–output model, intersectoral interdependencies are modeled, and the effects of structural and value-added changes in the non-financial sector (real sector) on the equilibrium state of the financial sector are evaluated. Empirical simulation results based on intersectoral balance tables indicate that a 10% increase in the value-added coefficient of the non-financial sector raises equilibrium prices in the financial sector by 1.54% in financial services, 1.82% in insurance and pension services (excluding compulsory social security), and 2.22% in auxiliary activities supporting financial and insurance services. Furthermore, a 10% increase in the final output of the non-financial sector increases total output in the financial sector by 7.53%, 9.02%, and 7.93%, respectively. These findings demonstrate strong transmission linkages between the non-financial and financial sectors, highlighting that the Leontief model allows for a quantitative assessment of these interdependencies and an analysis of the mechanisms of price and value-added transmission.
Leontief model, input–output analysis, value-added transmission, financial sector, equilibrium prices
Copyright (c) 2026 Murad Yusifov (Author) https://creativecommons.org/licenses/by/4.0/
CONTENT ANALYSIS OF INTEGRATIVE CONNECTIVITY DIRECTIONS OF TRANS-CASPIAN AND NORTH-SOUTH CORRIDOR COUNTRIES
The article assesses the integration potential of international transport corridors, identifies obstacles to the development of transregional cooperation and puts forward recommendations for their elimination. Uncertainty situations affecting the competitiveness of transport and logistics infrastructures are considered. The main objectives of the study are the development of regional economic cooperation processes, coordination of regional routes, integration into the international transport and logistics network and the preparation of conceptual proposals for strengthening the country's position in regional trade. Content analysis covers traditional and conceptual aspects. The main contribution of the study is to identify directions for strengthening the integrative connectivity of transport corridors connecting major economic centers such as the EU and China. Against the background of global geopolitical uncertainties, the coordination of logistics infrastructures in the Caspian and Central Asian regions and sustainable regional cooperation relations are studied in a systematic manner. The aspects of the integrative connectivity of the North-South and Trans-Caspian Routes, the development directions of the processes of joint trade and intermodal transport cooperation of the countries of the region, in particular, the ways to overcome difficulties related to infrastructure systems and the functional elements connecting the corridors were identified. Conceptual solutions and proposals were put forward on the integration of Azerbaijan into the transregional logistics system, the improvement of transport infrastructure for the prospects of this policy, the strengthening of the role of the ports of Baku and Aktau as the main elements connecting the transregional corridors, and the realization of the regional integration potential.
AZCON Holding, Baku International Sea Port, Transregional logistics infrastructures, Trans-Caspian Route (Middle Corridor), North-South International Transport Corridor.
Copyright (c) 2026 Mushfig Guliyev, Pikakhanum Khudiyeva, Susan Farzaliyeva, Murad Akhundov (Author) https://creativecommons.org/licenses/by/4.0/
ANALYSIS OF THE TRANSITION OPPORTUNITIES TO CORPORATE GOVERNANCE PRINCIPLES IN AZERBAIJANI COMPANIES
This research aims to evaluate the current conditions and practical transition pathways to corporate governance standards in Azerbaijan. The focus lies on both state-owned enterprises (SOEs) and private or family-run companies, assessing the effectiveness of regulatory frameworks and internal governance mechanisms. The study applies a mixed-method approach, including document analysis of national legal acts (Civil Code, Listing Rules of the Baku Stock Exchange, Cabinet resolutions), content analysis of ESG reports, and a comparative review of OECD and EBRD country diagnostics. The findings indicate that although a strong regulatory foundation exists, practical implementation varies significantly across sectors. Common weaknesses include the limited authority of independent board members, the superficial nature of ESG disclosures, and underdeveloped internal audit and risk management structures. The scientific novelty of the study lies in proposing a “transition roadmap” that outlines a step-by-step approach to enhancing corporate governance structures within Azerbaijani companies. This roadmap includes adopting model charters for board committees, introducing the “comply or explain” principle into annual reporting, and gradually integrating ESG metrics starting from governance and social indicators. The study's practical relevance is high: it provides actionable guidelines for improving investor confidence, aligning corporate practices with international standards, and strengthening governance transparency and efficiency. In particular, the model addresses the unique characteristics of Azerbaijani firms operating in a transition economy context, where familial ownership and informal decision-making often dominate.
corporate governance, ESG disclosure, regulatory framework, board independence, transition model.
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GLOBAL FOOD WASTE AND ITS SOCIO-ECONOMIC IMPORTANCE OF EFFECTIVE MANAGEMENTE OF EFFECTİVE MANAGEMENT
The article examines the nature, volume, neutralization, and utilization of waste and losses, especially food waste and losses, from a scientific and methodological perspective, drawing on international experience. The need to study the management of waste and losses is scientifically substantiated by highlighting important problems related to the interaction between the generation of food waste under global conditions and the fact that a significant part of people still suffer from hunger and malnutrition. In the research process, the classification of food waste, its areas of occurrence and causes, and the consequences of sometimes not complying with the requirements of environmental and technological norms and standards were scientifically studied, taking into account reality. The volume of food waste and losses on a global and Azerbaijani scale, the mechanisms for their effective management and utilization were analyzed, and the possibilities of wide application of modern digital technologies were shown. In order to reduce food waste, the socio-economic importance of rationalizing storage, nutrition culture, packaging, transport and logistics, disposal, and other processes related to products generated in supply and food chain facilities, as well as their use as raw materials for green energy, fertilizer in crop production, and feed additives in livestock farming in auxiliary areas, has been reflected. In addition, the article also discusses the application of innovative technologies in food waste management and the use of advanced international experience to improve the supply of food products to the population in the world and in our country, and, most importantly, to minimize the costs spent on food safety and environmental protection; finally, their socio-economic and ecological importance has been scientifically substantiated and relevant proposals have been made.
food waste, management, disposal, environment, economic efficiency.
IMPACT OF DIGITAL TRANSFORMATION ON THE OIL AND GAS SECTOR
The article reviews the application possibilities of digital technologies in line with the challenges of digital transformation in the oil and gas sector, their main directions and the problems that may arise with the application of digitalization. The role of digital technologies in managing the operations of oil and gas companies, reducing operating costs and making optimization decisions is analyzed. It also substantiates the usefulness that they can bring to the potential growth of hydrocarbon reserves produced by the global industrial method, ensuring stability in energy security and managing the energy sector in new ways. The purpose of the study is to adapt the digital transformation process in the oil and gas sector to the reduction of CO₂ emissions and the “net zero” strategy and to determine the application possibilities of digital technologies by analyzing the digitalization strategies of international oil and gas companies. The article uses the methods of analysis, systematic approach, synthesis and comparative analysis.
digitization, oil and gas sector, digital technologies, CO2 emission, oil and gas company.
THE ROLE OF INVESTMENTS IN DESIGN AND BRANDING IN ENHANCING THE COMPETITIVENESS OF LIGHT INDUSTRY ENTERPRISES
This article examines the role of investments directed towards design and branding in enhancing the competitiveness of light industry enterprises. In modern global markets, not only production capacity but also the aesthetic value of products, their distinctive features, and brand capital emerge as key sources of competitive advantage. The article first explains the economic essence of design and branding and their mechanisms of influence on the market position of enterprises. It then analyzes the current state of the light industry sector in Azerbaijan, the functioning of design centers, and the institutional and financial constraints encountered in the process of brand creationThe findings reveal that targeted investments in design and branding not only increase the volume of production but also contribute to the expansion of export potential, the strengthening of the “Made in Azerbaijan” concept, the creation of new jobs, and the establishment of a sustainable position in international markets. As a result, the article recommends strengthening supportive state policies, establishing design and branding laboratories for SMEs, and expanding innovative support mechanisms in technoparks.
design, branding, light industry, competitiveness, investment.
A COMPARATIVE ANALYSIS OF THE EVOLUTIONARY PATH AND STRATEGIC STRUKTURE OF THE ARTIFICIAL INTELLIGENCE POLICY SYSTEMS IN CHINA AND AZERBAIJAN
Artificial intelligence has become a key technology for strategic competition and the modernization of social governance among countries, and it has promoted a new round of policy system reshaping. This paper takes China and Azerbaijan as research objects, systematically reviews the evolutionary paths and strategic structural characteristics of the two countries’ artificial intelligence policy systems, and conducts a cross-national comparative analysis based on public policy documents, industry data, and development plans. Since 2017, China has built a multi-level and systematic artificial intelligence policy system through top-level design, forming a full-chain layout from core technology research and development and industrial transformation to ethical governance. Azerbaijan launched a national artificial intelligence strategy in 2025, and its policy system remains at an early stage of construction, emphasizing basic capacity building and an international cooperation orientation. By comparing the similarities and differences between the two countries in terms of policy evolution logic, strategic goal setting, implementation mechanisms, and institutional capacity, this article reveals the inherent relationship between differences in development stages and governance logic, and puts forward theoretical suggestions for policy structure optimization and medium- and long-term coordinated layout. This article does not focus on specific local experiences, nor does it explore the effects of technology application in depth, but seeks to construct a comparative perspective on the evolution of macro-level policy systems, providing a theoretical basis and practical reference for understanding the AI policy construction paths of different countries.
AI policy, policy evolution, strategic structure, Azerbaijan, China-Azerbaijan cooperation.
ADVANCING ECONOMIC PROSPERITY THROUGH INNOVATION: THE AZERBAIJANI MODEL OF INNOVATION-DRIVEN ECONOMIC GROWTH
This study proposes a novel economic development model for Azerbaijan, leveraging the “Quintuple Helix” framework to drive innovation-based growth and ensure long-term sustainability. As Azerbaijan transitions from a resource-dependent economy to one driven by innovation, competitiveness, and diversification, this research provides an analysis of both domestic innovation activities and international best practices to formulate a comprehensive model. The proposed model emphasizes the integrated collaboration of five key stakeholders: government, private sector, research and educational institutions, civil society, and ecological sustainability. Such collaboration is essential for the successful implementation of innovation-led economic transformation. Strategic priorities identified within the model include renewable energy, development of the startup ecosystem, growth of small and medium-sized enterprises (SMEs), and expansion of the digital economy. This research underscores the critical role of coordinated policy measures and regulatory reforms in fostering a robust innovation ecosystem. The findings provide valuable insights for policymakers, business leaders, and academic institutions, offering a structured approach to enhancing Azerbaijan’s competitiveness and sustainability in a rapidly evolving global economy. The study also calls for future research that incorporates empirical case studies and quantitative evaluations to assess the practical impact of the proposed model.
innovation, technological innovation, research and development, innovation policy, green technology, start up, macroeconomic policy coordination, development.
IMPACT OF AGRICULTURAL SECTOR DEVELOPMENT ON THE FORMATION AND DYNAMICS OF THE AGRO-FOOD MARKET
The main aim of the study is to explore the development prospects of Azerbaijan’s agri-food market, its structural characteristics, and strategic directions. The research considers both the potential of the domestic market and competitiveness in regional and global markets. It also seeks to identify factors ensuring sustainable development in the agricultural sector, analyze the effectiveness of subsidies and state support mechanisms, and propose optimal strategies to enhance production and export potential. The study employed statistical analysis, comparative analysis, a systematic approach, and logical generalization. Key components of Azerbaijan’s agri-food market were thoroughly analyzed, including the producer structure, cooperative activities, state subsidy programs, market infrastructure, and digitalization levels. Strategic measures such as regional production specialization, logistics development, and adoption of innovative technologies were also evaluated. Findings indicate that increasing production volumes, properly organizing regional specialization, and improving logistics and market infrastructure are fundamental for the sustainable development of the market. Additionally, implementing innovative technologies and expanding cooperative activities significantly contributes to higher productivity and integration of local production into global markets. The study’s limitation lies in the occasional insufficiency of available statistical and practical data, highlighting the need for more detailed field research in the future. Its practical significance is substantial for improving agricultural development strategies, enhancing government policy efficiency, and strengthening farmers’ economic resilience, as well as long-term planning and competitiveness in international markets.
agricultural sector, agro-food market, government regulation, subsidy mechanisms, regional specialization.
A RISK-BASED INTEGRATED MODEL FOR FINANCIAL EVALUATION OF PUBLIC–PRIVATE PARTNERSHIP (PPP) PROJECTS IN THE TRANSPORT SYSTEM
This article proposes a new Risk-Based Integrated Model (RAIM) for the financial evaluation of Public–Private Partnership (PPP) projects in the transport system. The model integrates three traditional methods Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period into a unified analytical framework that incorporates risk analysis through Monte Carlo simulation. This approach allows for a more comprehensive assessment of project sustainability under economic and operational uncertainties. An empirical analysis based on the Hanoi–Vinh high-speed railway project demonstrates the model’s applicability. Using hypothetical cash flow data, the results show that the project’s NPV equals USD 1.25 billion, IRR reaches 11%, and the Payback Period is 12 years. In a risk scenario with a 15% decline in passenger demand, the NPV decreases to USD 950 million and IRR drops to 8%. These findings emphasize the importance of government subsidies and balanced risk-sharing mechanisms in maintaining project viability. The scientific novelty of this study lies in introducing a risk-adjusted integration of NPV, IRR, and Payback Period methods, offering a multidimensional and practical tool for PPP project evaluation and contributing to the sustainable development of transport infrastructure.
public-private partnership (PPP), transport infrastructure, net present value (NPV), internal rate of return (IRR), payback period.
BLOCKCHAIN IN BUSINESS: SCIENTIFIC BASIS, ECONOMIC IMPACT, AND CHALLENGES
This article provides a comprehensive analysis of blockchain technology as a transformative force in the digital economy, focusing on its scientific foundations, technical mechanisms, economic implications, and challenges for business adoption. Blockchain, as a distributed ledger technology, ensures decentralization, immuta-bility, transparency, and data security, offering a fundamentally new way of organizing transactions and trust in economic systems. The study highlights its multidimensional impact across finance, supply chains, energy, healthcare, government services, and aviation, emphasizing how programmable transactions and smart contracts reshape business processes, reduce transaction costs, and enable new organizational forms. Special attention is given to asset tokenization, decentralized finance (DeFi), and central bank digital currencies (CBDCs), which represent innovative business models emerging from blockchain integration. The article situates blockchain research within its historical and theoretical roots, starting with Satoshi Nakamoto’s foundational 2008 paper, and traces the evolution of scientific literature from technical proofs of concept to systematic reviews addressing governance, regulation, and sustainability. Empirical studies from 2019–2024 show that blockchain generates the highest returns in contexts characterized by information asymmetry and complex intermediation, such as financial clearing or medical data sharing. At the same time, persistent barriers include scalability, interoperability, energy consumption, cyber threats, and fragmented regulation. The rapid rise of Blockchain-as-a-Service (BaaS) further expands accessibility, allowing firms to integrate blockchain solutions without heavy infrastructure costs. However, achieving sustainable large-scale implementation requires resolving legal uncertainties, developing unified performance metrics, and addressing environ-mental concerns. Overall, blockchain is analyzed not only as a technical tool but as a strategic instrument of digital transformation, reshaping business models, trust dynamics, and global economic interactions.
blockchain, digitalization, innovation, decentralization, challenges.
PROBLEMS OF ENTREPRENEURSHIP DEVELOPMENT IN THE CONTEXT OF THE FORMATION OF A GREEN ECONOMY
The study is devoted to the scientific-theoretical and practical analysis of the problems of entrepreneurship development in the context of the formation of a green economy. The aim of the research article is to study the trends of the green transformation of entrepreneurship, existing problems, and institutional mechanisms in Azerbaijan. The relevance of the work is driven by the need to identify institutional, financial, and innovative constraints in this area within the context of global environmental challenges and the "Azerbaijan 2030" National Priorities. The study, using methods of comparative, analytical, systemic, and statistical analysis, examines data from local (SSC, KOBİA) and international (UNEP, OECD, World Bank) sources for the 2015-2024 period. The research addresses questions about the essence of green entrepreneurship, the role of SMEs in this process (17.8% share in 2024), and the effectiveness of innovations ("Smart City"). As a scientific novelty, the problems of green entrepreneurship development in Azerbaijan (financial, institutional, innovative) are comprehensively studied for the first time, and a systematized analytical model of influencing factors is formed. The practical significance lies in the fact that, as a result of the research, a package of practical recommendations has been developed to improve state policy and stimulate a green business environment. The results can be used in the formation of economic policy and in SME projects.
green economy, green entrepreneurship, innovative development, green transformation, SMEs (Small and Medium-sized Businesses).