Page 104 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.80, # 1, 2023, pp. 94-105

Our regression model has an R value of 0.963, it means that there is a strong positive
correlation between the dependent variable and the independent variable(s). The R-
value ranges between -1 and +1, with 1 indicating a perfect positive correlation and -
1 indicating a perfect negative correlation. Therefore, an R-value of 0.963 indicates
that there is a very strong positive correlation between the variables.

The R-squared value of 0.927 indicates that approximately 92.7% of the variability in
the dependent variable is explained by the independent variable(s). The R-squared
value ranges between 0 and 1, with 1 indicating that all the variability in the dependent
variable is explained by the independent variable(s). Therefore, an R-squared value
of 0.927 indicates that the regression model is a good fit for the data and that the
independent variable(s) can explain a large proportion of the variability in the
dependent variable. The Adjusted R-squared value of 0.923 is similar to the R-squared
value but takes into account the number of independent variables in the model. The
adjusted R-squared value adjusts for the effect of adding more variables to the model
and is often a better measure of the goodness of fit for models with multiple
independent variables. In summary, our regression model has a strong positive
correlation between the dependent and independent variables, a good fit to the data,
and a moderate amount of variability in the errors or residuals. Based on our statistical
analysis we can conclude that there is a strong relationship between FDI inflows and
Azerbaijan’s Non-Oil GDP, that’s why we can accept the Alternative hypothesis.

CONCLUSIONS AND RECOMMENDATIONS

In conclusion, this study provides evidence that there is a strong relationship between
FDI inflows and Azerbaijan’s Non-Oil GDP. The findings suggest that FDI can be an
effective tool for promoting economic growth and diversifying the economy in
Azerbaijan. FDI can contribute to economic diversification and growth in non-oil
sectors of the economy, which is important for reducing Azerbaijan's dependence on
oil exports. Therefore, policies that attract foreign investment and promote
diversification are likely to be beneficial for Azerbaijan's long-term economic
development. However, the study also highlights the challenges that FDI faces in the
country, including a lack of infrastructure, bureaucratic barriers, and political
instability. These challenges must be addressed in order to fully realize the potential
benefits of FDI for Azerbaijan's economy.
Based on the findings of this study, several recommendations can be made for
policymakers and investors in Azerbaijan. First, policymakers should prioritize the
development of infrastructure, including transportation, telecommunications, and
energy systems, in order to improve the business environment for investors. Second,
efforts should be made to reduce bureaucratic barriers and streamline regulatory
processes to make it easier for investors to do business in the country.

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