Impact of exchange rate and imports on the export structure dynamics in Ukraine

The article examines the sources of structural changes in the export sector and industrial production in Ukraine. The composition of exports in favor of commodities has been relatively stable over the recent decade serving as a factor facilitating the growth of primary exports at the expense of manufactured exports, as suggested by the income and import elasticity of exports and production sectors. In order to assess robustness of the results, an empirical estimation is conducted with the use of alternative statistical methods, such as the two-stage least-squares (2SLS), vector autoregression (VAR), and the Kalman filter. The main finding is that devaluation of the hryvnia does not contribute to the growth of manufactured exports, which is highly dependent upon the imports of capital goods. The exports of non-traditional commodities with higher value-added have higher import sensitivity but lower real exchange rate elasticity. The author establishes an asymmetrical impact of exchange rate dynamics on the industrial production and exports in the primary and technological branches of industry.