Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/108655 
Year of Publication: 
2014
Series/Report no.: 
Working Paper No. 1411
Publisher: 
Koç University-TÜSİAD Economic Research Forum (ERF), Istanbul
Abstract: 
Micro-level empirical research has begun to obtain important results on the effects of currency variations on firms' survival. To date, the literature has lacked detailed analysis of the effects of exchange rates on firms' survival behavior in emerging markets due to a scarcity of firm level information. Using a unique firm-level dataset, we test the impact of currency appreciation on the survival behavior of Turkish firms in manufacturing industries for 2002-2009. The results suggest that real exchange rate appreciation decreases the probability of survival in manufacturing industries. We also find that high (low) productivity firms have higher (lower) probability of survival than low (high) productivity firms as a result of domestic exchange rate appreciation. This evidence indicates that economic events/policies leading to appreciation in domestic currency should be cautiously managed, especially in a resource constrained emerging market economy such as Turkey.
Subjects: 
Exchange rate
firm-level
export
emerging markets
survival
JEL: 
F14
F31
F41
Document Type: 
Working Paper

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