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Exchange Rate Volatility and Employment Growth in Developing Countries: Evidence from Turkey

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  • Demir, Firat

Abstract

Summary Employing a unique panel of 691 private firms that accounted for 26% of total value added in manufacturing in Turkey, the paper explores the impacts of exchange rate volatility on employment growth during the period of 1983-2005. The empirical analysis using a variety of specifications, estimation techniques, and robustness tests suggests that exchange rate volatility has a statistically and economically significant employment growth reducing effect on manufacturing firms. Using point estimates, the results suggest that for an average firm a one standard deviation increase in real exchange rate volatility reduces employment growth in the range of 1.4-2.1 percentage points.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 38 (2010)
Issue (Month): 8 (August)
Pages: 1127-1140

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Handle: RePEc:eee:wdevel:v:38:y:2010:i:8:p:1127-1140

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Web page: http://www.elsevier.com/locate/worlddev

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Keywords: exchange rate volatility employment growth manufacturing firms South Eastern Europe Turkey;

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Cited by:
  1. Lo Turco, Alessia & Maggioni, Daniela, 2013. "Does Trade Foster Employment Growth in Emerging Markets? Evidence from Turkey," World Development, Elsevier, vol. 52(C), pages 1-18.
  2. Demir, Firat & Caglayan, Mustafa, 2012. "Firm Productivity, Exchange Rate Movements, Sources of Finance and Export Orientation," MPRA Paper 37397, University Library of Munich, Germany.
  3. Dhasmana, Anubha, 2013. "Real Effective Exchange Rate and Manufacturing Sector Performance: Evidence from Indian firms," MPRA Paper 47479, University Library of Munich, Germany.

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