Exchange Rate Sensitivity in Free Zone Trade: An Empirical Study of the Istanbul Ataturk Airport Free Zone

This study as part of an ongoing research effort, empirically examines the relationship between foreign trade in the Istanbul Ataturk Airport Free Zone and exchange rate movements. Monthly data from 2003 to 2016 were analyzed through stationarity tests (Unit Root), followed by the Vector Autoregressive (VAR) model, Cointegration Analysis, and the Toda-Yamamoto Causality Test. The findings indicate that the exchange rate does not significantly affect imports and exports in the free zone. This result suggests that free zones, due to their structural characteristics and operational framework, may be relatively insulated from exchange rate fluctuations. The study contributes to the literature by providing a focused analysis of a specific free zone in Turkiye, highlighting the potential independence of free zone trade from exchange rate volatility.