The effect of changes in real exchange rates on sectoral exports: Turkey example

The aim of our study is to investigate the effect of real exchange rate changes on exports. In this direction, it was aimed to measure the reaction of 100 exporting companies in the Turkish economy against the exchange rate. For the 2004-2018 period, annual export data of the companies were used. In the model in which the panel GMM method is used, the real effective exchange rate is used as the independent variable, as well as the total sales as an indicator of firm size and the growth figures of the countries with the most exports, which are accepted as an indicator of foreign demand. The findings obtained from the econometric analysis show that the increase in the real effective exchange rate, sales figures and economic growth variables increases exports. In the study, then, 100 companies were classified as 6 different sectors with the most exports according to the sector in which they operate and the sectoral export effect of the real effective exchange rate was tested. As a result of the findings obtained from the sector-based analysis, the appreciation of the national currency causes a decrease in the exports of the automotive and iron and steel sectors in line with the theoretical expectation, while it causes an increase in the exports of the food, electricity and machinery sectors. In the textile and chemical substances and products sectors, the coefficient was statistically insignificant. Keywords: Real Exchange Rate, Firm Export, Panel GMM