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A Comparative Analysis in the Field of the Economic Exposure to Currency Risk

Author

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  • Belascu Lucian

    (“Lucian Blaga†University of Sibiu)

Abstract

Currency fluctuations became a daily habit of nowadays financial markets and their impact canbe felt in all companies, from the mere domestic ones to the transnational corporations withintricate businesses around the world. Our paper investigates the economic exposure to currencyrisk for a number of 20 companies from Romania and Croatia, between 2006 and 2011, on a shorttermand long-term perspective. The results picture a different image regarding these companies’exposure either to the Euro and the US dollar. We find that Romanian companies are moreexposed to unexpected changes in the value of their national currency against both the Euro andthe US dollar compared to Croatian companies, with the exposure more pregnant over the longterm. This may be explained by the exchange rate regime applicable to both currencies: a managedfloating for the Romanian currency and a more controlled rate for the Croatian currency.

Suggested Citation

  • Belascu Lucian, 2017. "A Comparative Analysis in the Field of the Economic Exposure to Currency Risk," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 413-418, June.
    • Handle: RePEc:ovi:oviste:v:xvii:y:2017:i:1:p:413-418
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    References listed on IDEAS

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    1. Alexandra HOROBET & Sorin DUMITRESCU, 2008. "Insights Into Central And Eastern European Countries Competitiveness: On The Exposure Of Capital Markets To Exchange Rate Risk," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 2, pages 107-125, November.
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    Cited by:

    1. HOROBEȚ Alexandra & VRÎNCEANU Georgiana Maria, 2021. "Foreign Exchange and Oil Exposure of CEE Companies: Risks for Investors in Financial and Energy Industries," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 01, March.

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    More about this item

    Keywords

    Currency risk; economic exposure; currency fluctuations;
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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