Comments on Exchange Rates and Firm Exports: The Role of Foreign Ownership and Foreign Subsidiaries

2020 ◽  
Vol 19 (2) ◽  
pp. 119-119
2020 ◽  
Vol 19 (2) ◽  
pp. 103-118
Author(s):  
Hyelin Choi ◽  
Hyo Sang Kim

This paper examines the role of global production linkages on exchange rate elasticities by using Korean firm-level data. Firms with foreign ownership or with foreign subsidiaries, which are linked to global production, tend to weaken the effects of exchange rate movements on firm exports. We find the exchange rate elasticities of firm exports are significant and tend to have a negative effect on domestic firms or firms with no foreign subsidiary. In contrast, the results show an insignificant effect on foreign-owned firms or firms with foreign subsidiaries. After controlling for the export to foreign affiliates, we still find the estimated exchange rate elasticities of exports to be statistically insignificant, although it has a negative and relatively large impact for firms with global production linkages. Moreover, firms with a higher global value chain integration measure or more imported intermediate inputs have a significantly lower exchange rate elasticity of exports. This indicates that the developments in global production linkages have an important role in explaining lower exchange rate elasticity to exports.


2012 ◽  
Vol 148 (3) ◽  
pp. 425-447 ◽  
Author(s):  
David Greenaway ◽  
Richard Kneller ◽  
Xufei Zhang
Keyword(s):  

World Economy ◽  
2010 ◽  
Vol 33 (8) ◽  
pp. 961-986 ◽  
Author(s):  
David Greenaway ◽  
Richard Kneller ◽  
Xufei Zhang

2019 ◽  
Vol 22 (3) ◽  
pp. 117-129
Author(s):  
Jana Šimáková ◽  
Nikola Rusková

The aim of the paper is to evaluate the effect of exchange rates on the stock prices of companies in the chemical industry listed on the stock exchanges in the Visegrad Four countries. The empirical analysis was performed from September 2003 to June 2016 on companies from the petrochemical and pharmaceutical industry. The effect of the exchange rate on stock prices is analyzed using Jorion’s approach on monthly data. In contrast to the selected petrochemical companies, the pharmaceutical companies did not use any hedging instruments in the tested period. The effect of the exchange rate on the stock price was proved only in the case of companies from the pharmaceutical industry. This suggests that exchange rate risk could be eliminated by using hedging instruments.


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