Multidimensional assessment of transportation sector’s performance: Nonparametric analysis of the Azerbaijani economy
DOI:
https://doi.org/10.21638/spbu05.2024.404Abstract
Increasing geopolitical tensions and changing economic relations between East and West are prompting new studies in geographically favorable countries such as Azerbaijan. The Azerbaijani government has significantly improved the country’s transport infrastructure since the oil boom period, but the multidimensional performance of the sector is still not well studied in academia, leaving a knowledge and methodological gap that this research attempts to fill. To this end, principal component analysis (PCA) was applied to the collected annual data between 1998 and 2022 to create index-based performance indicators for each transport sector (e. g., railway, aviation, maritime). Variables such as employment, investment, revenue, etc. were used to conduct the performance assessment through the dimensional reduction approach. Then, actual and potential performance were compared by applying the Hodrick —Prescott (HP) filter. The results indicate that the aviation, maritime and road transport sectors have a positive upward trend in their potential performance. Meanwhile, the railway sector has deteriorated significantly and the pipeline sector has slowed down, although the recovery from the COVID-19 pandemic and the Ukrainian conflict in 2022 has made the Azerbaijani transport sector a viable alternative for international partners. In addition, the railway and maritime sectors are more volatile in their performance compared to the other sectors. Thus, while the railway infrastructure needs urgent reforms, other sectors should also increase their potential and actual performance. This study provides an opportunity to adjust public transportation policies and also contributes to theory through a systematic detailed examination of the performance of each sector.
Keywords:
Azerbaijani economy, Hodrick — Prescott filter, logistics, principal component analysis, Spearman’s rank correlation, transportation
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