DYNAMIC LINKAGES BETWEEN REGIONAL AND ARMENIAN AQUACULTURE: EVIDENCE FROM PCA AND ARDL ERROR CORRECTION ANALYSIS

Abstract

Abstract: Aquaculture is the fastest-growing food production sector globally and guarantees food security and nutrition. Aquaculture production in Armenia increased significantly over the past three decades, increasing approximately tenfold. In this context, it is important to study the dynamics of aquaculture production in the region and the impact of regional market pressures on Armenian production, considering the country’s right to start exporting aquaculture to the EU. This study examines the impact of regional aquaculture expansion on Armenian aquaculture. Using Principal Component Analysis, regional growth and divergence factors were extracted and incorporated into an ARDL Error Correction framework. Results reveal a long‑run cointegration with regional growth trend and negative short-run effects. Nevertheless, the system rapidly corrects disequilibria through cointegration.