Firm-Level Competition and Exchange Rate Exposure: Evidence from a Global Survey of Firms

2014 ◽  
Vol 43 (4) ◽  
pp. 885-916 ◽  
Author(s):  
Mikael C. Bergbrant ◽  
Kaysia Campbell ◽  
Delroy M. Hunter
Keyword(s):  
Exchange Rate ◽  
Firm Level ◽  
Global Survey ◽  
Exchange Rate Exposure

Factors Determining the Exchange Rate Exposure of Firms: Evidence from India

2021 ◽  
pp. 227853372110337
Author(s):  
Zakiya Begum Sayed ◽  
J. Gayathri
Keyword(s):  
Exchange Rate ◽  
Multinomial Logistic Regression ◽  
Exchange Rate Volatility ◽  
Strategic Decision ◽  
Firm Level ◽  
Factors Affecting ◽  
Business Operations ◽  
Industrial Sectors ◽  
Exchange Rate Exposure ◽  
The Exchange Rate

Exchange rate exposure is a strategic decision in finance and risk management at both the micro and macro level of business operations. Literature on the measurement, and management of this risk, has had no consensus on the factors affecting it as these factors seem to be dynamic. In an effort to consider a comprehensive study at the firm level, this article examines the exchange rate exposure of 271 constituent firms from the BSE S&P 500 index. The study period was 2001 to 2020 divided into sub-periods around the financial crises of 2008. The study uses two contemporary approaches (the capital market approach and the cash flow approach) and five relevant exchange rates (USD, EURO, GBP, JPY, and REER) to measure the foreign exchange. The sample firms were divided into 10 industrial sectors to identify the factors that lead to exposure of firms to exchange rate volatility. We use multinomial logistic regression to regress the select factors with the measured value of exchange rate exposure. The findings of the article suggest that multinationality, fixed asset utilization ratio, hedging activities, industrial sectors, size, and age of the firms are the significant determinants of such exposure. The results varied during the sub-periods and across industries.

scholarly journals Exchange Rate Exposure of Chinese Firms at the Industry and Firm Level

2015 ◽  
Vol 19 (3) ◽  
pp. 592-607 ◽  
Author(s):  
Bo Tang
Keyword(s):  
Exchange Rate ◽  
Chinese Firms ◽  
Firm Level ◽  
Exchange Rate Exposure

The degree of international trade and exchange rate exposure—Firm‐level evidence from two small open economies

2020 ◽  
Author(s):  
Van Cauwenberge Annelies ◽  
Vancauteren Mark ◽  
Braekers Roel ◽  
Vandemaele Sigrid
Keyword(s):  
International Trade ◽  
Exchange Rate ◽  
Open Economies ◽  
Small Open Economies ◽  
Firm Level ◽  
Exchange Rate Exposure ◽  
Trade And Exchange

Firm-level exchange rate exposure in the Eurozone

2010 ◽  
Vol 19 (5) ◽  
pp. 468-478 ◽  
Author(s):  
Elaine Hutson ◽  
Anthony O’Driscoll
Keyword(s):  
Exchange Rate ◽  
Firm Level ◽  
Exchange Rate Exposure

Economic exposure to exchange rate risk and financial hedging

2019 ◽  
Vol 46 (4) ◽  
pp. 965-984 ◽  
Author(s):  
Ekta Sikarwar ◽  
Roopak Gupta
Keyword(s):  
Exchange Rate ◽  
Practical Significance ◽  
Family Ownership ◽  
Governance Mechanism ◽  
Firm Level ◽  
Content Type ◽  
Exchange Rate Exposure ◽  
Financial Hedging ◽  
Non Linear ◽  
Currency Derivatives

Purpose The purpose of this paper is to examine the potential non-linear relationship between family ownership as a governance mechanism and exchange rate exposure of firms that use financial hedging. Design/methodology/approach The exchange rate exposure is estimated using two-factor Jorion (1990) model for a sample of 312 Indian firms over the period from 2001 to 2016. The cross-sectional regression model is used at the second stage to investigate the effects of family ownership on exposure for the firms that use currency derivatives. Findings The results suggest a significant non-linear cubic relationship between family ownership and exchange rate exposure. Exchange rate exposure increases with family ownership at low and high levels (as a result of improper hedging) and decreases with family ownership at intermediate levels (as a consequence of value-enhancing hedging). Practical implications The study has practical significance for firms to understand the circumstances in which currency derivatives usage is ineffective in alleviating exposure. Firms that have high or low family ownership should integrate operational hedges with financial hedges and should incorporate other firm-level governance mechanisms to avoid the misuse of derivatives. Originality/value This study provides new evidence that the relationship between family ownership and exchange rate exposure is non-linear for firms that use financial hedging which has not been investigated before in the prior literature.

scholarly journals Exchange Rate Exposure : International Evidence from Daily Firm-Level Data

2017 ◽  
Vol 32 (1) ◽  
pp. 112-159 ◽  
Author(s):  
Bang Nam Jeon ◽  
Dazhi Zheng ◽  
Lei Zhu
Keyword(s):  
Exchange Rate ◽  
Firm Level ◽  
International Evidence ◽  
Exchange Rate Exposure ◽  
Level Data ◽  
Firm Level Data

Exchange Rate Exposure of Stock Returns at Firm Level

2014 ◽  
Author(s):  
Prabhath Jayasinghe ◽  
Gamini Premaratne
Keyword(s):  
Exchange Rate ◽  
Stock Returns ◽  
Firm Level ◽  
Exchange Rate Exposure

Currency Crises and Exchange Rate Exposure

2013 ◽  
Vol 21 (1) ◽  
pp. 49-70
Author(s):  
Jin-Wan Cho ◽  
AiLian Bian ◽  
Kyung-In Park
Keyword(s):  
Exchange Rate ◽  
Currency Crises ◽  
Foreign Currency ◽  
Exchange Rate Regime ◽  
Exchange Rate Volatility ◽  
Flexible Exchange Rate ◽  
Firm Level ◽  
Exchange Rate Exposure ◽  
Floating Exchange Rate ◽  
The Government

While undergoing currency crises, countries under fixed exchange rate regime elect to adopt flexible exchange rate regime. It is generally expected that if a country launches floating exchange rate regime, the exchange rate volatility increases. Therefore, the increase in exchange rate volatility may increase exposures to currency risks at the firm level. Previous research, however, such as Bian, Park and Cho (2006) shows that right after the currency crisis of 1997~1998, currency risk exposure for Korean firms actually decreased after the government adopted flexible exchange rate regime. In this study, we intend to study the effects of changes in exchange rate regimes on foreign currency exposures at the firm level around the currency crises in the 1990s using worldwide data. We use 2116 firms in 23 countries finds evidence that exchange rate exposure of majority of firms decreases after the financial crises. In a sub-sample analysis in which sub-samples are created depending on whether the home country changed exchange rate regime from fixed to flexible, we find that the reduction of exposure was greater for firms in countries that changed the regimes than those in countries that did not.

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