Turkey’s Export Performance: Examining the Main Determinants of Export Volume (1995-2012)

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In this study the short and the long run relationships between export performance and real effective exchange rate changes in Turkey are investigated using the quarterly data sets covering the period of 1995-2012. The other factors that are expected to affect export performance such as wage, foreign income, productivity, trend GDP and exchange rate volatility are also added to the model. The ARDL bounds testing approach is performed in the estimation process and the causalities among these variables in the model are determined based on the estimated ARDL models. The empirical results reveal that the variables of interest are cointegrated. Real effective exchange rate coefficient is significantly positive in the short run whereas negative in the long run and exchange rate volatility has no significant effect on export performance in contrast with theoretical expectations. Other evidences indicate that Turkey’s export boom in the period examined can be explained by wages, productivity and world demand, rather than exchange rate changes. Consequently, these findings highlight that the policies depressing wages, stimulating high productivity and facilitating foreign market access can help export sectors increase their performance and competitiveness in Turkey.

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Export volume , export performance , ARDL bounds testing approach , Turkey.

Ege Academic Review (EAR)

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Ege Academic Review (EAR)