Exchange Risk Sensitivity and Its Determinants: A Firm and Industry Analysis of U.S. Multinationals
AbstractWe develop a model of firm valuation to examine the exchange risk sensitivity of 409 U.S. multinational firms during the 1978-89 period. In contrast to previous studies, we find that exchange rate fluctuations do affect firm value. More specifically, we find that approximately sixty percent of firms with significant exchange risk exposure gain from a depreciation of the dollar. We also find that cross-sectional differences in exchange risk sensitivity are linked to key firm-specific operational values (i.e., foreign operating profits, sales, and assets). Although we find limited support for exchange risk sensitivity when we aggregate the data into 20 SIC-based industry groups, we do observe some cross-sectional and inter-temporal variation in the significant exchange risk sensitivity during the weak-dollar as compared to the strong-dollar period.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Financial Management Association in its journal Financial Management.
Volume (Year): 24 (1995)
Issue (Month): 3 (Fall)
Contact details of provider:
Postal: University of South Florida 4202 E. Fowler Ave. COBA #3331 Tampa, FL 33620
Web page: http://www.fma.org/
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Courtney Connors) The email address of this maintainer does not seem to be valid anymore. Please ask Courtney Connors to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.