Nijat Gasim

Center of Excellence for Research, Development and Innovation, Baku State University, Baku, Azerbaijan

nijatgasim@bsu.edu.az 

ORCID 0000-0002-3976-1283

Assessing the middle-income trap in post-Soviet countries: Evidence from unit root tests

Shahriyar Mukhtarov

Faculty of Business and International Relations, Vistula University, Warsaw, Poland; 

Department of Economics, Korea University, Seoul, 02481, South Korea; 

BEU-Scientific Research Center, Baku Engineering University, Baku, Azerbaijan;

UNEC Empirical Research Center, Azerbaijan State University of Economics (UNEC), Baku, Azerbaijan.

s.mukhtarov@vistula.edu.pl

ORCID 0000-0001-6248-6120

Galib Gafarli

Department of World Economy, Baku State University, Baku, Azerbaijan; 

Department of Finance and Accounting, Azerbaijan State Agricultural University, Ganja, Azerbaijan.

qalibqafarli@bsu.edu.az

ORCID 0000-0002-2292-2896

Farid Jabiyev

Department of Economics, Indiana University Bloomington, USA;

Karabakh Economic Research Center, Azerbaijan State University of Economics (UNEC), Baku, Azerbaijan.

fcebiyev@gmail.com

ORCID 0000-0002-6675-0264

Abstract. This study investigates whether post-Soviet countries are caught in the middle-income trap, using the Robertson and Ye (2013) approach. A comprehensive set of unit root tests was employed, including traditional tests (ADF), nonlinear tests (KSS, Kruse, Sollis), and advanced Fourier-based tests (FKPSS, FF-ADF, FADF, FKSS, FKruse, FSollis) to analyze the data spanning from 1990 to 2023. The results revealed a significant heterogeneity in convergence patterns across the countries. It can be concluded that Moldova, Kyrgyzstan, Tajikistan, Armenia, Azerbaijan, Belarus, and Georgia exhibited stationarity in most tests, indicating that these countries are in the middle-income trap. In contrast, Kazakhstan, Uzbekistan, Turkmenistan, Russia, and Ukraine displayed non-stationary results, suggesting that they are not in the trap and are converging toward higher income levels. In addition, the radar chart, coefficient of variation, and three different Multi-Criteria Decision Analysis techniques (Equal Weight Score, Discrimination Weighted Score, and Entropy Weighted Score) were used for robustness check. The results of these tests appear to be consistent with the outcomes of the unit root tests.

Received: April, 2024

1st Revision: October, 2024

Accepted: March, 2025

DOI: 10.14254/2071-8330.2025/18-1/10

JEL Classification: C12, C22, F63, O4, O47

Keywords: middle-income trap, unit roots, nonlinear unit roots, Fourier unit roots, post-Soviet Countries, MCDA methods