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

  • Demir, Firat

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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File URL: http://mpra.ub.uni-muenchen.de/24477/1/MPRA_paper_24477.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 24477.

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Date of creation: 2010
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Publication status: Published in World Development 38.8(2010): pp. 1127-1140
Handle: RePEc:pra:mprapa:24477
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