The Effects Of Exchange Rate Shocks On Sectoral Mergers And Acquisitions: Evidence From Turkey

Official URL: https://risc01.sabanciuniv.edu/record=b3199998

The primary aim of this thesis is to examine the causal effects of the exchange rate shock in 2018 on sectoral mergers and acquisitions within Turkey. To achieve this, the study utilizes detailed, micro-level data-sets sourced from the Entrepreneur Information System (EIS). By capitalizing on the differences between import and export exposures across various sectors, this thesis shows that M&A ratio tends to decrease in sectors that are more exposed to the shock through export while M&A ratio increases more in sectors that are more exposed to the shock through import. Notably, these patterns are particularly prominent for small firms employing 10-50 employees. Furthermore, the study reveals a notable surge in M&A transactions and firm exits in 2018, coinciding with the significant depreciation of the Turkish lira. Additionally, the findings suggest that the acquired firms tend to exhibit higher productivity levels compared to the firms that exit the market, thereby implying an effective mechanism for mergers and acquisitions.