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The Enterprise Risk Management of Foreign Exchange Exposures: Evidence from Taiwanese Hospitality Industry

Author

Listed:
  • Hsiao, Chiu-Ming
  • Zhang, Wei-Fang
  • Chiu, Chi-Chang
  • Huang, Jung-Chang
  • Huang, Yu-Ling

Abstract

For this paper, I use the ARIMA model to study the relationship between business performance and exchange rate fluctuations. Through this model, the empirical results shows that the influences of foreign exchange rate fluctuations on the tourist hotel business performance are significant and different across currencies and firms. Furthermore, according to the framework of Kim (2013) we employ the modern portfolio theory proposed by Markowitz (1952) to give an optimal foreign exchange allocation for each tourist hotel company's financial decision-makers, which will avoid the risk of exchange rate fluctuations expose and reduce losses due to the fluctuations of exchange rates, and complete the construction of enterprise risk management system (ERM).

Suggested Citation

  • Hsiao, Chiu-Ming & Zhang, Wei-Fang & Chiu, Chi-Chang & Huang, Jung-Chang & Huang, Yu-Ling, 2017. "The Enterprise Risk Management of Foreign Exchange Exposures: Evidence from Taiwanese Hospitality Industry," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 4(1), pages 32-48.
    • Handle: RePEc:aoj:ajeaer:v:4:y:2017:i:1:p:32-48:id:229
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    Cited by:

    1. Eunhye (Olivia) Park & Woo-Hyuk Kim, 2021. "The effect of inventory turnover on financial performance in the US restaurant industry: The moderating role of exposure to commodity price risk," Tourism Economics, , vol. 27(7), pages 1417-1429, November.
    2. Chung-Fu Lai, 2018. "Fiscal Policy and Macroeconomic Fluctuations in a Fixed Exchange Rate Regime," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(10), pages 1257-1273, October.
    3. Kirsneh Alemu Kebede, 2024. "The Effect of Availability of Foreign Exchange and Devaluation of BIRR on the Performance of Companies in Ethiopia (Instance of Sample Company)," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 99-117.
    4. Amrizah Kamaluddin & Norhafizah Ishak & Nor Farizal Mohammed, 2019. "Financial Distress Prediction Through Cash Flow Ratios Analysis," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(3), pages 63-76, May.

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