The Dollar Exposure of Japanese Companies
The bulk of Japanese exports and imports are denominated in dollars rather than Japan's local currency, the yen.The consequences of dollar invoicing depend importantly on whether Japanese companies hedge their dollar exposures. If Japanese companies are able fully to hedge their dollar exposures either by using derivative products, locating production in the United States or matching dollar revenues with dollar costs then the choice of invoicing currency will not influence the yen profits of Japanese companies. This paper estimates the degree to which Japanese companies are exposed to movements in the dollar using Japanese stock market data and an international version of the CAPM model to estimate the extent to which Japanese company returns are correlated with changes in the yen-dollar exchange rate.
(This abstract was borrowed from another version of this item.)
Volume (Year): 12 (1998)
Issue (Month): 4 (December)
|Contact details of provider:|| Web page: http://www.elsevier.com/locate/inca/622903|
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.:
- Jia He & Lilian K. Ng, 1998. "The Foreign Exchange Exposure of Japanese Multinational Corporations," Journal of Finance, American Finance Association, vol. 53(2), pages 733-753, 04.
- Joseph E. Gagnon & Michael M. Knetter, 1992.
"Markup Adjustment and Exchange Rate Fluctuations: Evidence From Panel Data on Automobile Exports,"
NBER Working Papers
4123, National Bureau of Economic Research, Inc.
- Gagnon, Joseph E. & Knetter, Michael M., 1995. "Markup adjustment and exchange rate fluctuations: evidence from panel data on automobile exports," Journal of International Money and Finance, Elsevier, vol. 14(2), pages 289-310, April.
- Magee, Stephen P & Rao, Ramesh K S, 1980. "Vehicle and Nonvehicle Currencies in International Trade," American Economic Review, American Economic Association, vol. 70(2), pages 368-73, May.
- Grassman, Sven, 1976. "Currency distribution and forward cover in foreign trade : Sweden revisited, 1973," Journal of International Economics, Elsevier, vol. 6(2), pages 215-221, May.
- Yusuru Ozeki & George S. Tavlas, 1992. "The Internationalization of Currencies; An Appraisal of the Japanese Yen," IMF Occasional Papers 90, International Monetary Fund.
- Marston, Richard C., 1990. "Pricing to market in Japanese manufacturing," Journal of International Economics, Elsevier, vol. 29(3-4), pages 217-236, November.
- Bartov, Eli & Bodnar, Gordon M, 1994. " Firm Valuation, Earnings Expectations, and the Exchange-Rate Exposure Effect," Journal of Finance, American Finance Association, vol. 49(5), pages 1755-85, December.
- Fukuda Shin-ichi & Cong Ji, 1994.
"On the Choice of Invoice Currency by Japanese Exporters: The PTM Approach,"
Journal of the Japanese and International Economies,
Elsevier, vol. 8(4), pages 511-529, December.
- Shin-ichi Fukuda & Ji Cong, 1994. "On the Choice of Invoice Currency by Japanese Exporters: The PTM Approach," Discussion Paper Series a289, Institute of Economic Research, Hitotsubashi University.
- Grassman, Sven, 1973. "A fundamental symmetry in international payment patterns," Journal of International Economics, Elsevier, vol. 3(2), pages 105-116, May.
- Nance, Deana R & Smith, Clifford W, Jr & Smithson, Charles W, 1993. " On the Determinants of Corporate Hedging," Journal of Finance, American Finance Association, vol. 48(1), pages 267-84, March.
- Bodnar, Gordon M. & Gentry, William M., 1993. "Exchange rate exposure and industry characteristics: evidence from Canada, Japan, and the USA," Journal of International Money and Finance, Elsevier, vol. 12(1), pages 29-45, February.
- Jorion, Philippe, 1990. "The Exchange-Rate Exposure of U.S. Multinationals," The Journal of Business, University of Chicago Press, vol. 63(3), pages 331-45, July.
When requesting a correction, please mention this item's handle: RePEc:eee:jjieco:v:12:y:1998:i:4:p:388-405. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.