E-Commerce and Economic Diversification in A Resource-Dependent Economy: The Case of Azerbaijan

Abstract

This article examines how e-commerce can contribute to economic diversification in a resource-dependent economy using Azerbaijan as a focused case. Rather than treating growth in online transactions as a direct measure of digital transformation, the study separates access, adoption, transaction intensity, domestic value capture and aggregate economic performance. The analytical framework combines endogenous-growth logic, digital-economy theory and country-specific institutional conditions. It draws on an official-source architecture covering annual digital-development context for 2013–2023 and a higher-frequency payment layer for 2018–2023. The analysis argues that e-commerce contributes to diversification only when payment modernization is complemented by domestic merchant capability, logistics, competition, skills, trust and the capacity to retain value inside the national economy. In a hydrocarbon-sensitive macroeconomic environment, total GDP is an imperfect short-run indicator of the contribution of digital commerce because oil output, fiscal expenditure, reconstruction, external demand and commodity prices can dominate aggregate fluctuations. The article therefore proposes a conditional interpretation: expansion of e-commerce is economically meaningful as an enabling mechanism for formalization, market access, firm scaling and data generation, but the magnitude of its contribution depends on whether digital transactions translate into domestic production and productivity. The findings support a policy shift from transaction-growth targets toward ecosystem quality and domestic value capture.