Determinants of corporate exchange rate exposure in Chilean firms
AbstractThis paper investigates the impact of exchange rate fluctuations on the value of non-financial firms in Chile. Using a detailed dataset on firms' foreign activities and use of FX derivatives, the potential determinants of the identified exposure are examined. Foreign exchange exposure depends on the levels of foreign currency debt and foreign currency assets. Exports, depending on the specification used, also appear as a determining factor. Neither imports nor the use of FX derivatives explain exposure. Chilean firms attempt hedges through matching foreign assets and income with foreign debt. Also the level of firms' liquidity, measured through cash flows, reduces exchange rate exposure.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Central Bank of Chile in its journal Economía Chilena.
Volume (Year): 16 (2013)
Issue (Month): 3 (December)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jorion, Philippe, 1990. "The Exchange-Rate Exposure of U.S. Multinationals," The Journal of Business, University of Chicago Press, University of Chicago Press, vol. 63(3), pages 331-45, July.
- Bartram, Söhnke M. & Brown, Gregory W. & Minton, Bernadette, 2009.
"Resolving the Exposure Puzzle: The Many Facets of Exchange Rate Exposure,"
14041, University Library of Munich, Germany.
- Bartram, Söhnke M. & Brown, Gregory W. & Minton, Bernadette A., 2010. "Resolving the exposure puzzle: The many facets of exchange rate exposure," Journal of Financial Economics, Elsevier, Elsevier, vol. 95(2), pages 148-173, February.
- Luis Felipe Cespedes & Roberto Chang & Andres Velasco, 2000.
"Balance Sheets and Exchange Rate Policy,"
NBER Working Papers
7840, National Bureau of Economic Research, Inc.
- Luis Felipe Céspedes & Roberto Chang & Andrés Velasco, 2004. "Balance Sheets and Exchange Rate Policy," American Economic Review, American Economic Association, American Economic Association, vol. 94(4), pages 1183-1193, September.
- Moguillansky, Graciela, 2002. "Non-Financial Corporate Risk Management and Exchange Rate Volatility in Latin America," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Bartram, Söhnke M. & Bodnar, Gordon, 2005.
"The Exchange Rate Exposure Puzzle,"
6482, University Library of Munich, Germany.
- Dominguez, Kathryn M.E. & Tesar, Linda L., 2006.
"Exchange rate exposure,"
Journal of International Economics, Elsevier,
Elsevier, vol. 68(1), pages 188-218, January.
- Sohnke M. Bartram, 2002.
"Linear and Nonlinear Foreign Exchange Rate Exposures of German Nonfinancial Corporations,"
- Bartram, Sohnke M., 2004. "Linear and nonlinear foreign exchange rate exposures of German nonfinancial corporations," Journal of International Money and Finance, Elsevier, Elsevier, vol. 23(4), pages 673-699, June.
- Chue, Timothy K. & Cook, David, 2008. "Emerging market exchange rate exposure," Journal of Banking & Finance, Elsevier, Elsevier, vol. 32(7), pages 1349-1362, July.
- Chow, Edward H & Lee, Wayne Y & Solt, Michael E, 1997. "The Exchange-Rate Risk Exposure of Asset Returns," The Journal of Business, University of Chicago Press, University of Chicago Press, vol. 70(1), pages 105-23, January.
- Jia He & Lilian K. Ng, 1998. "The Foreign Exchange Exposure of Japanese Multinational Corporations," Journal of Finance, American Finance Association, American Finance Association, vol. 53(2), pages 733-753, 04.
- Sohnke M. Bartram & Gregory W. Brown & Frank R. Fehle, 2003.
"International Evidence on Financial Derivatives Usage,"
0307003, EconWPA, revised 24 Jul 2003.
- Söhnke M. Bartram & Gregory W. Brown & Frank R. Fehle, 2009. "International Evidence on Financial Derivatives Usage," Financial Management, Financial Management Association International, Financial Management Association International, vol. 38(1), pages 185-206, 03.
- Muller, A. & Verschoor, Willem F.C., 2008. "The Latin American exchange exposure of U.S. multinationals," Journal of Multinational Financial Management, Elsevier, Elsevier, vol. 18(2), pages 112-130, April.
- Kevin Cowan & Erwin Hansen & Luis Oscar Herrera, 2005.
"Currency Mismatches, Balance Sheet Effects and Hedging in Chilean non-Financial Corporations,"
Working Papers Central Bank of Chile, Central Bank of Chile
346, Central Bank of Chile.
- Kevin Cowan & Erwin Hansen & Luis Oscar Herrera, 2005. "Currency Mismatches, Balance-Sheet Effects and Hedging in Chilean Non-Financial Corporations," Research Department Publications, Inter-American Development Bank, Research Department 4387, Inter-American Development Bank, Research Department.
- Jorge A. Chan-Lau, 2005. "Hedging Foreign Exchange Risk in Chile," IMF Working Papers 05/37, International Monetary Fund.
- Doidge, Craig & Griffin, John & Williamson, Rohan, 2006. "Measuring the economic importance of exchange rate exposure," Journal of Empirical Finance, Elsevier, Elsevier, vol. 13(4-5), pages 550-576, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudio Sepulveda).
If references are entirely missing, you can add them using this form.