Impact of Exchange Rate Volatility on Turkey’s Export (2003-2013)

Nyew, Shing Joo (2018) Impact of Exchange Rate Volatility on Turkey’s Export (2003-2013). Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

This paper attempts to investigate the long-run and short-run relationships between Turkish exports, exchange rate volatility, foreign income, and relative prices by employing quarterly data for the period 2003Q1- 2013Q4. Towards this purpose, multivariate co-integration such as unit root test and ARDL method, as well as the error correction model (ECM) techniques are used in this study. The long-run estimation results suggest that relative export prices and real exchange rate volatility have positive and statistically significant impacts on Turkish exports, while foreign economic activities affect Turkish exports negatively and significantly. In addition, the results of the ECM model indicate that foreign economic activities have a negative and significant effect, relative export prices has a significant effect, and the exchange rate volatility has a positive and significant effect on Turkish exports.