Firm Productivity, Exchange Rate Movements, Sources of Finance and Export Orientation

Demir, Firat and Caglayan, Mustafa (2012): Firm Productivity, Exchange Rate Movements, Sources of Finance and Export Orientation.

Abstract

We investigate the level and volatility effects of real exchange rates on the productivity growth of manufacturing firms with heterogeneous 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 rm productivity is positively related to having access to external credit. Additionally, we find that while export (inward) oriented firms are aaffected less (more) by exchange rate appreciations, they are more (less) sensitive to exchange rate volatility.

• Item Type: MPRA Paper
• Language: English
• Keywords: Productivity growth, Exchange rate volatility; Source of finance; Capital structure; Export orientation
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G31 - Capital Budgeting ; Fixed Investment and Inventory Studies ; Capacity; F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; F - International Economics > F3 - International Finance > F31 - Foreign Exchange; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies

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