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This paper, using a rich dataset on Turkish firms for the 2005–2014 period, analyzes the relationship between firm-product sales in different markets to identify the channels that link exports and domestic sales. First, I use an instrumental variables strategy and establish that an exogenous 10% rise in exports increases a firm's domestic sales by 2.6% on average. Second, I do an analogous exercise at the firm-product level, and find coefficients that are almost twice as large, hinting to the importance of product-specific scale effects. Moreover, I propose a novel approach to isolate the production versus non-production factors that influence firm dynamics by focusing on non-produced (or carry-along trade, CAT) exports. I find that CAT exports also affect domestic sales positively, suggesting that spillovers at the firm level such as the easing of liquidity constraints play a role. In the process, I reveal that export demand shocks influence firms' expansion in terms of employment, wages, and investment. Finally, my quantification exercise indicates that export demand shocks explain about 1.4% of the annual variation in Turkish domestic sales on average. This figure, which shows heterogeneities at the sector level, rises to 4.6% during the Great Recession in 2009, when demand in Turkey's key export partners collapsed. [ABSTRACT FROM AUTHOR]

This study analyzes the persistency of total and disaggregated Turkish exports for different shock magnitudes using the quantile autoregression (QAR) method in line with Koenker and Xiao (J Am Stat Assoc 99:775-787, 2004). The results suggest that the persistence of shocks are not similar across different quantiles of Total Exports and disaggregated export sectors, indicating an asymmetry in the case of negative and positive shocks across different export sectors. The persistency behavior of Total Exports as well as Food and Beverages, Chemicals, Basic Metals, Raw Materials, Motor Vehicles and Radio & TV exports are asymmetric to negative versus positive shocks, which cannot be captured by traditional unit root tests. Thus, sound interpretation of QAR results is necessary for policy makers to identify shock characteristics and thereby pursue appropriate policies for overcoming adverse impacts on the economy. [ABSTRACT FROM AUTHOR]

In this paper a non-linear model is applied, where suddenly strong spurts of exports occur when changes of the exchange rate go beyond a zone of inaction, which we call 'play' area-analogous to mechanical play. We implement an algorithm describing path-dependent play-hysteresis into a regression framework. The hysteretic impact of real exchange rates on Greek exports is estimated based on the period from 1995Q1 to 2014Q4. Looking at some of the main export partners of Greece, the euro area, Turkey and the US, and some of its most important tradeable sectors we identify significant hysteretic effects for a part of the Greek exports. We find that Greek export activity is characterized by 'bands of inaction' with respect to changes in the real exchange rate and calculate the further real depreciation needed to trigger a spurt in Greek exports. To check for robustness we (a) estimate Greek export equations for a limited sample excluding the recent financial crisis, (b) use export weight instead of deflated nominal exports as the dependent variable, (c) employ a political uncertainty variable as a determinant of the width of the area of weak reaction. Overall, we find that those specifications which take uncertainty into account display the best goodness of fit. In other words: the option value of waiting dominates the real exchange rate effect on Greek exports. [ABSTRACT FROM AUTHOR]

This investigation includes non-price factors such as patent applications and government and business characteristics into macroeconomic export demand functions because these determinants might also be relevant for international competitiveness. Results from panel cointegration as well as dynamic panel models for a sample of up to 27 countries from 1980-2011 show that conventional factors like the real effective exchange rate or foreign demand are important determinants of export demand. However, neglecting non-price factors such as patents which proxy innovativeness of a country or political stability which represents a solid business environment also affect export demand significantly positive. Thus, from a policy point of view, the focus on the exchange rate in order to remain competitive in international trade seems to be a too narrow perspective. Instead, politicians should also take care of these supply side factors if their focus is to increase a country's export competitiveness. [ABSTRACT FROM AUTHOR]