Business, Management and Accounting
7 years ago

Turkish firms stabilize prices amidst exchange rate fluctuations, impacting profitability.

Central bank review
Exchange Rate Pass-Through and Exposure in the Turkish Economy
Nazlı Karamollaoğlu

Paper Summary

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Trade Impact

The article looks at how changes in exchange rates affect export prices and firm profitability in the Turkish manufacturing industry from 1995 to 2007. They used data on export prices, exchange rates, revenues, costs, and sales values. The results suggest that export prices tend to stay stable when exchange rates fluctuate. On average, around 60% of exchange rate changes are passed on to export prices. The impact of exchange rate variations on firm profitability varies across companies. However, these findings are not consistent across different ways of analyzing the data.