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

  • Demir, Firat

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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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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