Agric. Econ. - Czech, 2013, 59(5):235-246 | DOI: 10.17221/122/2012-AGRICECON

The effect of real exchange rates and their volatilities on the selected agricultural commodity exports: A case study on Turkey, 1971-2010Original Paper

Halit YANIKKAYA1, Huseyin KAYA2, Osman Murat KOCTURK3
1 Gebze Institute of Technology, Gebze-Kocaeli, Turkey
2 Bahcesehir University, Istanbul, Turkey
3 Celal Bayar University, Manisa, Turkey

This study investigates the effect of the exchange rate volatility and the real exchange rate on the bilateral agricultural exports flows of Turkey to 46 countries. A panel data set, which contains 46 cross-sections and 1840 observations, is used for exports of the selected agricultural commodities to countries from 1971 to 2010. Our empirical results based on a gravity equation show that while the exchange rate volatility does not exert a significant effect on the Turkish agricultural commodity exports, the real exchange rate has a statistically significant effect on the agricultural commodity export flows. Regardless of the region chosen, raisins and tobacco exports are very much sensitive to the real exchange rates. It means that any depreciation in the Turkish Lira leads to higher exports for these commodities. We have also some interesting results on other commodities. Exports of dried figs show no sensitivity to the exchange rate or its volatilities, except for the EU countries. For the full sample, exports of citrus, grape and hazelnuts increases as the TL depreciates. The sensitivity of hazelnut to the real exchange rates varies among regions.

Keywords: agricultural trade, exchange rate volatility, gravity, panel

Published: May 31, 2013  Show citation

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YANIKKAYA H, KAYA H, KOCTURK OM. The effect of real exchange rates and their volatilities on the selected agricultural commodity exports: A case study on Turkey, 1971-2010. Agric. Econ. - Czech. 2013;59(5):235-246. doi: 10.17221/122/2012-AGRICECON.
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