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Firm productivity, exchange rate movements, sources of finance and export orientationInventories and sales uncertainty

  • Mustafa Caglayan


    (Department of Economics, The University of Sheffield)

  • Firat Demir

We investigate the level and volatility effects of exchange rates on the productivity growth of manufacturing firms with heterogenous access to debt, and domestic and foreign equity markets in Turkey. We find that while exchange rate volatility affects productivity growth negatively, having access to foreign or domestic equity, or debt markets does not alleviate these effects. Furthermore, foreign owned or publicly traded companies do not appear to perform significantly better than the rest. We detect, however, that firm productivity is positively related to having access to external credit. Additionally, we find that while export (inward) oriented firms are affected less (more) by exchange rate appreciations, they are more (less) sensitive to exchange rate volatility.

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Paper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2011004.

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Length: 42 pages
Date of creation: Feb 2011
Date of revision: Feb 2011
Handle: RePEc:shf:wpaper:2011004
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