The role of productivity, wages, demand, and exchange rates on export performance: Evidence from the Turkish manufacturing industry

Ahmet Koluman () and Fatih Kaplan ()

Economic Journal of Emerging Markets, 2025, vol. 17, issue 1, 82-94

Abstract: Purpose — This study explores the determinants of export performance in the Turkish manufacturing industry by examining the effects of productivity, wages, demand, and sector-specific real effective exchange rates from 2006 to 2019.Methods — Using firm-level export data across 21 manufacturing sectors, the study applies a Fixed-Effects model with Driscoll-Kraay standard errors to address heteroscedasticity, autocorrelation, and cross-sectional dependence. Endogeneity concerns are mitigated using Two-Step System GMM estimation, complemented by Moment Quantile Regression (MQR) for robustness checks across the export distribution.Findings — The results reveal that higher productivity, increased wages, and stronger external demand significantly enhance exports, while currency appreciation adversely affects export performance. Productivity emerges as the most influential factor.Implication — Productivity enhancement, stable exchange rate management, and workforce development support export-driven growth. Targeted policies that strengthen sectoral competitiveness and expand foreign market access are essential for sustaining manufacturing exports.Originality — This study departs from traditional macro-level analyses by constructing sector-specific indices for real exchange rates and external demand. It offers a more granular and precise understanding of export dynamics. The methodological rigor combines static and dynamic panel estimators to ensure robustness and advance empirical insights into firm-level export behavior.

Keywords: Manufacturing industry; sectoral export; panel data; Türkiye (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:uii:journl:v:17:y:2025:i:1:p:82-94:id:37378

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