This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Currency Hedging For Export-Flexible Firms

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
KIT PONG WONG
Abstract

This paper examines the production and hedging decisions of a competitive exporting firm under exchange rate uncertainty. The firm possesses export flexibility in that it can distribute its output to either the domestic market or a foreign market, after observing the true realization of the exchange rate. It is shown that the separation theorem does not hold under export flexibility, i.e., the firm's optimal output depends on the firm's preference and on the underlying exchange rate uncertainty. Furthermore, the export-flexible firm underhedges its exchange rate risk exposure in a currency forward market wherein the forward exchange rate contains a non-positive risk premium. [D21, F31]

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.

File URL: http://taylorandfrancis.metapress.com/link.asp?target=contribution&id=U2181848758J118M
File Format: text/html
File Function:
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by Korean International Economic Association in its journal International Economic Journal.

Volume (Year): 15 (2001)
Issue (Month): 1 (April)
Pages: 165-174
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:taf:intecj:v:15:y:2001:i:1:p:165-174

Contact details of provider:
Web page: http://taylorandfrancis.metapress.com/link.asp?id=110801

Order Information:
Web: http://www.tandf.co.uk/journals/subscription.html

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Other versions of this item:

References listed on IDEAS
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.:
  1. Broll, Udo & Wahl, Jack E, 1997. "Export Flexibility and Hedging," Bulletin of Economic Research, Blackwell Publishing, vol. 49(3), pages 205-11, July.
  2. Meese, Richard, 1990. "Currency Fluctuations in the Post-Bretton Woods Era," Journal of Economic Perspectives, American Economic Association, vol. 4(1), pages 117-34, Winter. [Downloadable!] (restricted)
  3. Broll, Udo & Wong, Kit Pong & Zilcha, Itzhak, 1999. "Multiple Currencies and Hedging," Economica, London School of Economics and Political Science, vol. 66(264), pages 421-32, November. [Downloadable!] (restricted)
  4. Udo Broll, 1999. "Export As An Option," International Economic Journal, Korean International Economic Association, vol. 13(1), pages 19-26, April. [Downloadable!] (restricted)
  5. Adam-Muller, Axel F. A., 1997. "Export and hedging decisions under revenue and exchange rate risk: A note," European Economic Review, Elsevier, vol. 41(7), pages 1421-1426, July. [Downloadable!] (restricted)
  6. Katz, Eliakim & Paroush, Jacob, 1979. "The effect of forward markets on exporting firms," Economics Letters, Elsevier, vol. 4(3), pages 271-274. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, 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.)

  1. Kit Pong Wong, 2002. "Export-Flexible Firms And Forward Markets," International Economic Journal, Korean International Economic Association, vol. 16(3), pages 81-95, October. [Downloadable!] (restricted)
Statistics
Access and download statistics

Did you know? IDEAS also indexes books.

This page was last updated on 2009-11-14.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.