The Effect of Exchange Rate Volatility on Export: An Econometric Analysis for the Turkish Economy

Stract Foreign trade and its determinants have become important because of the increasing financialization and globalization of the world economy. The importance of competitiveness in exports has led to the importance of exchange rate policies and the volatility of the exchange rate. Although there are many factors affecting exports, the main factor on which exporters are based is exchange rate and exchange rate volatility. The main objective of this study is to determine the direction and size of the effect of the exchange rate volatility on exports in the Turkish economy. In the econometric analysis of the study, data for the period 1998:01-2020:01 are used. In the empirical part of this study, the effect of exchange rate volatility estimated by ARCH/GARCH model on the exports of the Turkish economy is analyzed by ARDL methodology. As a result of the econometric analysis, it was found that exchange rate volatility positively affected exports, and the elasticity relationship between these two variables was low (0.05).