Principal component and regression analysis of the natural resource curse doctrine in the Azerbaijani economy

The Azerbaijani economy has long been discussed in academic literature with reference to the theories of natural resource curse (NRC) and Dutch disease. This is due Azerbaijan’s heavy dependence on oil gas industry for its economic growth development since 1995. While revenues from mineral resources helped overcome extreme poverty increased GDP per capita, macroeconomic stability was shaken by sharp decline commodity prices 2014 2015. reality prompted scholars look into significance NRC disease Azerbaijan. paper therefore aims contribute analyzing using principal component regression techniques (dynamic ordinary least squares) a way that not studied before. results this study show had negative impact institutional quality Azerbaijan between 1996 2019, which may translate further impacts. For reason, human capital channel tested possible impacts several associations were found. These indicate policymakers need take doctrine more seriously. Although first boom (2005–2014) over, facing second starting 2020, lowered institutions could significantly reduce benefits if left unmanaged.