Corporate sector liability dollarization and exchange rate balance sheet effect in Turkey

Date

2011-01-01

Author

Kesriyeli, Mehtap
Özmen, Erdal
Yigit, Serkan

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

228
views

0
downloads

In this study, we investigate the causes and balance sheet effect consequences of Liability Dollarization (LD) of nonfinancial sectors in Turkey. The dynamic panel data Generalized Method of Moments (GMM) results suggest that both sector specific and macroeconomic variables are significant in explaining the corporate sector LD. Industries appear to partially match the currency composition of their debt with their income streams. Devaluations are found to be contractionary, in terms of investments and profits, for sectors with higher LD. Macroeconomic instability affects the performance of the industries negatively. Our results also stress the importance of strong macroeconomic policy stance for an endogenous dedollarization process.

Subject Keywords

Economics and Econometrics

URI

https://hdl.handle.net/11511/41792

Journal

APPLIED ECONOMICS

DOI

https://doi.org/10.1080/00036846.2010.498353

Collections

Department of Economics, Article

Suggestions

OpenMETU
Core

Macroeconomic and institutional determinants of current account deficits Ozmen, E (Informa UK Limited, 2005-07-15) This study empirically investigates the effects of institutional and macroeconomic policy variables on current account deficits (CAD). Based on cross-section data for a broad number of countries, the results suggest that better governance increases whilst 'original sin' decreases the ability of an economy to sustain CAD. Exchange rate flexibility and openness appear to put a discipline on CAD. Consistent with the equity home bias and Feldstein-Horioka puzzle, CAD decrease with country size. The net impacts ...
Emerging market sovereign spreads, global financial conditions and US macroeconomic news Oezatay, Fatih; Özmen, Erdal; Sahinbeyogu, Guelbin (Elsevier BV, 2009-03-01) We investigate the impact of global financial conditions. U.S. macroeconomic news and domestic fundamentals on the evolution of EMBI spreads for a panel of 18 emerging market (EM) countries using daily data. To this end, we consider not only the conventional panel cointegration procedures but also the recent common correlated effects method to tackle cross-section dependence that may stem from common global shocks such as contagion. The results suggest that the long-run evolution of EMBI spreads depends on ...
Foreign money shocks and the welfare performance of alternative monetary policy regimes Senay, Ozge; Sutherland, Alan (Wiley, 2007-01-01) The welfare properties of monetary policy regimes for a country subject to foreign money shocks are examined in a two-country sticky-price model. Money targeting is found to be welfare superior to a fixed exchange rate when the expenditure switching effect of exchange rate changes is relatively weak, but a fixed rate is superior when the expenditure switching effect is strong. However, price targeting is superior to both these regimes for all values of the expenditure switching effect. A welfare-maximising ...
Purchasing power parity in OECD countries: Evidence from panel unit root Kalyoncu, Huseyin; Kalyoncu, Kahraman (Elsevier BV, 2008-05-01) This paper investigates the validity of purchasing power parity (PPP) for 25 OECD countries by using a panel unit-root methodology. The procedure used here is to examine stationarity of real exchange rate. Using ADF unit-root test on single time-series, it is found that real exchange rate of all OECD countries have unit root. This outcome, however, might be due to the generally low power of this test. The aim of this paper is to reconsider this issue by exploiting the extra information provided by the combi...
Interdependence of the banking sector and the real sector: evidence from OECD countries Şendeniz Yüncü, İlkay; Aydogan, Kursat (Informa UK Limited, 2008-01-01) This article investigates the validity of the credit view hypothesis in eleven OECD (Organization for Economic Cooperation and Development) countries over the period 1987:QI to 2003:QIII. The existence of a long-run relationship between the banking sector and the real sector is supported by cointegration test results. For some of the countries in the sample, Granger causality tests show the leading role of the banking sector in the real sector, thus supporting the credit view hypothesis, whereas for other c...

Citation Formats

M. Kesriyeli, E. Özmen, and S. Yigit, “Corporate sector liability dollarization and exchange rate balance sheet effect in Turkey,” APPLIED ECONOMICS, pp. 4741–4747, 2011, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/41792.