Currency Exposure Management in Multinational Companies: “Centralized Coordination” as an Alternative to Centralization

Influence of Macroeconomic Factors in the Capital Structure of Foreign Subsidiarie

Outlines of global transformations politics economics law ◽

10.23932/2542-0240-2017-10-4-101-113 ◽

2017 ◽

Vol 10 (4) ◽

pp. 101-113

Author(s):

João Paulo Martins Linhares ◽

Hsia Hua Sheng ◽

Daniela Verzola Vaz ◽

Nilton Deodoro Moreira Cardoso Junior

Keyword(s):

Capital Structure ◽

Foreign Currency ◽

Multinational Companies ◽

Rate Variation ◽

Macroeconomic Factors ◽

Head Office ◽

Currency Exposure ◽

Initial Hypothesis ◽

Panel Data Econometrics ◽

The Capital Structure

This article examines the influence of macroeconomic factors in the capital structure of subsidiaries of foreign multinational companies (SFM) in Brazil by comparing them with local Brazilian companies (LBC) during the period from 1998–2008. Panel data econometrics was used to analyze the data and test the hypotheses. During this period, exchange rate variation was positively associated with local leverage, which supported the hypothesis of income hedging in the context of foreign currency exposure of the head office. We also found less local leverage for foreign multinational companies when the macroeconomics scenario became more stable. Finally, contrary to the initial hypothesis, differences in financing rates between Brazil and the SFMs’ head office country were positively related to local leverage.

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Foreign Currency Risk Management Practices In U.S. Multinationals

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v13i2.5763 ◽

2011 ◽

Vol 13 (2) ◽

pp. 73 ◽

Cited By ~ 4

Author(s):

Stephen D. Makar ◽

Stephen P. Huffman

Keyword(s):

Risk Management ◽

Exchange Rates ◽

Foreign Exchange ◽

Management Practices ◽

Foreign Currency ◽

Multinational Companies ◽

Currency Risk ◽

Currency Exposure ◽

Industry Membership

<span>Todays multinational companies face potentially significant economic exposure to changing exchange rates. One way to manage such currency risk is through the use of foreign exchange derivatives. This paper examines how foreign exchange derivatives are used by U.S. multinationals. Recent studies report that the use of foreign exchange derivatives varies across U.S. multinationals and may depend on a variety of influences, including industry membership. We develop a model to explain these variations in the amounts of derivatives used in terms of differences in foreign currency exposure. The results are consistent with our expectations. In particular, the evidenced pertaining to a sample of 654 U.S. multinationals for the 1990-1994 period indicates that the notional amounts of foreign exchange derivatives are positively associated with the degree of foreign involvement, which proxies foreign currency exposure. Moreover, the results are not sensitive to industry membership or other interfirm differences. The findings of this paper are important because they contribute to a better understanding of the foreign currency risk management practices in U.S. multinationals.</span>

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Predictors of occupational stress in multinational companies in India

PsycEXTRA Dataset ◽

10.1037/e573012012-077 ◽

2008 ◽

Author(s):

D. Mahanta ◽

N. K. Chadha

Keyword(s):

Occupational Stress ◽

Multinational Companies

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Impact of external currency exposures on macroeconomic policies

Voprosy Ekonomiki ◽

10.32609/0042-8736-2020-8-23-40 ◽

2020 ◽

pp. 23-40

Author(s):

I. V. Prilepskiy

Keyword(s):

Monetary Policy ◽

Exchange Rate ◽

Positive Impact ◽

Exchange Rate Regime ◽

Macroeconomic Policies ◽

Panel Regressions ◽

Financial Account ◽

Currency Exposure ◽

Cross Country ◽

The Impact

Based on cross-country panel regressions, the paper analyzes the impact of external currency exposures on monetary policy, exchange rate regime and capital controls. It is determined that positive net external position (which, e.g., is the case for Russia) is associated with a higher degree of monetary policy autonomy, i.e. the national key interest rate is less responsive to Fed/ECB policy and exchange rate fluctuations. Therefore, the risks of cross-country synchronization of financial cycles are reduced, while central banks are able to place a larger emphasis on their price stability mandates. Significant positive impact of net external currency exposure on exchange rate flexibility and financial account liberalization is only found in the context of static models. This is probably due to the two-way links between incentives for external assets/liabilities accumulation and these macroeconomic policy tools.

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