The Influence of Exchange Rate on Performance of Furniture Industry: The Case of Turkey

In this study, the effect of the effective exchange rate on the industrial production index, capacity utilization rate, import and export of the furniture products sector was investigated. The analysis covers the period from 2007 to 2023, and the data consists of month observations. Since some of the variables are non-linear and not stationary at the same level, nonlinear autoregressive distributed lag limit test (NARDL), which takes into account asymmetric effects, was used as a method. According to the results of the research, it has been determined that in the short term, downward movements in the effective exchange rate increase the capacity utilization rate of the furniture sector with a significance of 5 %, while upward movements in the effective exchange rate decrease the industrial production index of the furniture sector with a significance of 1 %. Additionally, the downward movements in the effective exchange rate negatively affect the export of furniture products in the long term, while it positively affects the import of furniture in the short term.