FDI in Azerbaijan: A Structural Analysis of the Business Environment

Abstract

Although Azerbaijan could be an attractive destination for international business endeavors, there are massive barriers in practice. The national economy of Azerbaijan is divided among several clientelistic networks, capturing state institutions in order to back their own business activities and keep out competitors. Opportunities are limited to areas in which international firms channel technology into the country that cannot be provided locally. However, even in such cases, Western enterprises still have to comply with the particularities, rules and norms of the local clientelistic system in order to be successful.