Analysis of the Relationship between Privatization, Foreign Direct Investment, and Economic Growth in Azerbaijan

The solution of the main problems of the innovative development of the national economy directly depends on the attractiveness of foreign investments. In this study, the relationship between privatization, foreign direct investment, and economic growth is examined. In the analysis part, fully modified Least squares (fmols) and canonical cointegrating regress (CCR) tests, which show the cointegration rate, causal relationship, and correlation, were applied for statistical data reflecting the annual time series between 1996-2021. According to the results of the study, according to the FMOLS test results, it was concluded that a 1 percent increase in GDP led to 1.924,866 percent in privatization, and a 1 percent change in privatization led to a 0.906129 percent change in GDP. It also found that a 1 percent increase in privatization led to a 0.080900 percent (0.1811919 percent per CCR) increase in foreign direct investment. According to the CCR test, a 1 percent change in foreign direct investment also led to a 0.893101 percent change in privatization.