摘要：This study investigates the impact of social and physical infrastructure spending on the non-oil tradable
and non-tradable sectors while controlling for non-oil capital stock and employment in the Azerbaijani
economy for the period 1995-2014. The analysis employs the Engle-Granger and Phillips-Ouliaris cointegration
tests using FMOLS estimation results to test for the existence of long-run relationships. The
tests results indicate the existence of long-run relationships among the variables. The estimation results
reveal positive impacts of both social and physical infrastructure spending on non-oil tradable and
non-tradable outputs. However, the impacts on the non-tradable sector are considerably larger than
those on the non-oil tradable sector. Developing the non-resource tradable sector, and thereby reducing
possibility of the “Resource Curse” and especially the Dutch Disease, is one of the strategic aims of
natural resource-rich countries. In this regard, the findings of this research may be useful for Azerbaijani
policymakers in taking measures that aim at fostering the development of the non-oil tradable sector,
thereby avoiding possible negative outcomes of resource dependency.
