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The Effects of Exchange Rate Fluctuations on Corporations and Evidence from Turkey

Author

Listed:
  • Ali Hakan MUTLUAY
  • Tuncay Turan TURABOGLU

Abstract

This study analyzed the effects of exchange rate fluctuations on firms. To this end, the effects of exchange rate fluctuations on the performance of publicly traded firms which are registered to Istanbul Stock Exchange (ISE) are investigated. This relationship is analyzed through regression models of both Adler and Dumas (1984) and Jorion (1990) using the data for the period between 1997 and 2007 on 55 publicly traded firms. The ampirical results show that the exchange rate fluctuations affect firm’s performance with some time lag. Morever, the effect of exchange rate fluctuations on firm performance, negatively depends on the share of export in total sales. Firms with higher export share are more vulnerable to exchange rate fluctuations.

Suggested Citation

  • Ali Hakan MUTLUAY & Tuncay Turan TURABOGLU, 2013. "The Effects of Exchange Rate Fluctuations on Corporations and Evidence from Turkey," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 7(1), pages 59-78.
    • Handle: RePEc:bdd:journl:v:7:y:2013:i:1:p:59-78
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    More about this item

    Keywords

    Foreign Exchange; Foreign Exc. Exposures; Corporate Performance;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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