EXCHANGE RATE RISK and INTERNATIONAL TRADE: SURVEY RESULTS on TURKISH FIRMS

Abstract

This study investigates the relationship between exchange rate risk and international trade for Turkish firms. Different from earlier studies, we examine responses to a survey. We find that firms are aware of exchange rate risk, which is mainly caused by the movements in Euro and USD, and protect themselves through natural hedging or price adjustments. With the higher than expected volatility of exchange rates after the breakdown of the Bretton-Woods system in early 1970s, researchers had expected a reduced volume of international trade. Early studies provided some evidence that supported this expectation both theoretically and empirically (e.g., Clark, 1973, Ethier, 1973; Hooper and Kohlhagen, 1978; Cushman, 1986; Savvides, 1992). However, later studies showed necessary and sufficient conditions that may lead to ambiguous or even positive relationship between international trade and exchange rate risk. Some examples for theoretical studies are Neumann (1995), Franke (1991), Viaena and Vries (1992), and for empirical studies are Assery and Peel (1991)1.

Özet

Bu çal×üma döviz kuru riski ve uluslararas× ticaret aras×ndaki iliükiyi Türk firmalari için incelemektedir. Önceki çal×ümalardan farkl× olarak, firmalara uygulanan bir anketin sonuçlar× deùerlendirilmektedir. Sonuçta, firmalar×n, genelde, USD ve Euro’daki deùLümelerden kaynaklanan bu riskin fark×nda olduklar×Q×, ve kendilerini doùal hedge ile veya fiyatlar×Q× düzenleyerek koruduklar×Q× görmekteyiz. Bu çal×üma döviz kuru riski ve uluslararas× ticaret aras×ndaki iliükiyi Türk firmalari için incelemektedir. Önceki çal×ümalardan farkl× olarak, firmalara uygulanan bir anketin sonuçlar× deùerlendirilmektedir. Sonuçta, firmalar×n, genelde, USD ve Euro’daki deùLümelerden kaynaklanan bu riskin fark×nda olduklar×Q×, ve kendilerini doùal hedge ile veya fiyatlar×Q× düzenleyerek koruduklar×Q× görmekteyiz.