AZƏRBAYCANDA MALİYYƏ İNKİŞAFI VƏ İQTİSADİ ARTIM ARASINDA ƏLAQƏLƏRİN TƏDQİQİ
STUDY OF THE RELATIONSHIP BETWEEN FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH IN AZERBAIJAN

Summary/Abstract: The relationship between financial development and economic growth has been and continues to be the subject of scientific research for many years. The fact that the financial sector is one of the main areas in the process of economic growth of developed modern countries makes it necessary to study financial development and its effects on the economy in Azerbaijan. The main goal of the study is to determine the nature of the relationship between financial development and economic growth in the example of the non-oil sector in Azerbaijan. For this purpose, Toda-Yamamoto causality test was used in the analysis of causality relationships, and Johansen cointegration test was used to examine the longterm relationship. Statistical data published by the Central Bank of the Republic of Azerbaijan and the World Bank constitute the database of the statistical analyzes conducted in the study. As a result of the analysis, it was determined that the ratio of the loans given by the financial sector to GDP, which is used as an indicator of financial development, lead to the economic growth of the non-oil sector, but the reverse of this relationship, that is, the causality from economic growth to financial development, does not exist. In the long-term period, no relationship between indicators has been determined. By examining the finance-growth relationship in Azerbaijan, the study presents its main features, limitations and the importance of strengthening this relationship in the country's economy, and serves as a source for future research in this area.

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