Export expectations, exchange rates, and volatility: Asymmetric effects on export performance in Türkiye

Export performance depends not only on current economic conditions but also on firms' expectations about future market developments. This study examines the asymmetric effects of export expectations and exchange rate dynamics on Türkiye's export performance. Using quarterly data for 2011Q1–2023Q3, we estimate a Nonlinear Autoregressive Distributed Lag (NARDL) model that decomposes export expectations and the real effective exchange rate into positive and negative changes, while controlling for exchange rate volatility. A key contribution of the study is the use of the Export Expectation Index derived from the quarterly Foreign Trade Expectation Survey conducted by the Ministry of Trade of the Republic of Türkiye. The survey covers a large and stable sample of firms that account for a substantial share of Türkiye's foreign trade. The Export Expectation Index summarizes their forward-looking assessments, with responses weighted by each firm's share in exports. The results of the analysis reveal clear asymmetries. Negative shocks to export expectations are followed by significantly higher export growth in subsequent periods, consistent with exporters postponing export activity under adverse expectations and expanding exports when conditions improve, while positive shocks have no significant effect. Real exchange rate appreciation significantly reduces exports, while depreciation does not generate comparable gains, consistent with the high import dependence of Turkish exports. Exchange rate volatility has only a weak negative effect. In the short run, export growth is driven mainly by external demand from the European Union, although negative expectation shocks remain significant. The findings are robust across alternative specifications and point to asymmetric adjustment under uncertainty. By jointly analyzing forward-looking firm expectations, exchange rate movements, and volatility, the study contributes new evidence on export behavior in emerging markets.