ABSTRACT

Globalization turns the world economy into a union. At this stage, the cooperation between the countries has a more important role. In that union, the economic relations of Turkey and Azerbaijan, which have geographical and cultural intimacy, provide advantages for both these countries and strengthen their global locations. In this project, it is specified that, on micro level, Azerbaijan's direct foreign investment with Turkey is intense on the basis of both countries' companies and on macro level, foreign trade scale is analyzed, the trade relation is intense on the basis of import-export. The model about the foreign trade data of the two countries has been estimated according to these two findings. In the estimation, the factors which effect Azerbaijan's import and export with Turkey and Turkey’s import and export with Azerbaijan, and the effect of these factors have been investigated. According to the findings, the rise of both countries’ GDP increases the import of the other country. Turkey and Azerbaijan have mutual advantages and these advantages increases the global rivalry power of both countries and present the importance of mutual relations and common benefits.