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Exchange rate dynamics and heterogeneity in firm export behavior: A top-to-bottom analysis

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  • Okan Akarsu
  • Muhammet Enes Cirakli

Abstract

This study quantifies the impact of exchange rate fluctuations on Türkiye's export performance using detailed administrative data for 2009–2023. A 1 percentage point (pp) appreciation of the real exchange rate reduces total exports by about 0.50 pp, mainly through a 0.42 pp decline in export volume and a modest 0.04 pp decrease in dollar-denominated prices, indicating limited pass-through. Effects vary widely: larger and more productive firms are more resilient due to pricing flexibility, economies of scale, and market diversification, while SMEs and financially constrained firms face steeper declines. Manufacturing firms—large and small—are less sensitive, benefiting from higher value-added production and inelastic demand. Among highly leveraged firms, those at the top of their sectors show no significant pricing response, reflecting limits to pricing-to-market. These results underscore the role of firm characteristics and sectoral structure in shaping the trade effects of currency movements.

Suggested Citation

  • Okan Akarsu & Muhammet Enes Cirakli, 2026. "Exchange rate dynamics and heterogeneity in firm export behavior: A top-to-bottom analysis," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 26(2).
    • Handle: RePEc:tcb:cebare:v:26:y:2026:i:2:article:100256
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