IDEAS home Printed from https://ideas.repec.org/a/pal/jintbs/v22y1991i4p619-649.html
   My bibliography  Save this article

Exchange Rate Changes and the Distribution of Industry Value

Author

Listed:
  • Timothy A Luehrman

    (Harvard Business School)

Abstract

This article investigates the simple, widely-held hypothesis that an exogenous real home currency depreciation enhances the competitiveness of home country manufacturers vis á vis foreign rivals. The study associates changes in competitiveness with redistributions of value within an industry. Daily and weekly data on redistributions of value are obtained from world financial markets. The study estimates the relationship between changes in exchange rates and redistributions of value within the world automobile and steel industries during the period 1978-87. The data generally do not support the notion that firms benefit competitively from a depreciation of the home currency. On the contrary, for large fractions of both industries, a depreciation of the home currency is associated with a significant decline in their share of industry value.© 1991 JIBS. Journal of International Business Studies (1991) 22, 619–649

Suggested Citation

  • Timothy A Luehrman, 1991. "Exchange Rate Changes and the Distribution of Industry Value," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(4), pages 619-649, December.
  • Handle: RePEc:pal:jintbs:v:22:y:1991:i:4:p:619-649
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/jibs/journal/v22/n4/pdf/8490317a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: http://www.palgrave-journals.com/jibs/journal/v22/n4/full/8490317a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Alan M Rugman & Alain Verbeke, 2003. "Extending the theory of the multinational enterprise: internalization and strategic management perspectives," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(2), pages 125-137, March.
    2. Buckley, Peter J & Casson, Mark, 1981. "The Optimal Timing of a Foreign Direct Investment," Economic Journal, Royal Economic Society, vol. 91(361), pages 75-87, March.
    3. Frankel, Jeffrey & Stein, Ernesto & Wei, Shang-jin, 1995. "Trading blocs and the Americas: The natural, the unnatural, and the super-natural," Journal of Development Economics, Elsevier, vol. 47(1), pages 61-95, June.
    4. Alan M. Rugman & Alain Verbeke, 2003. "Multinational enterprises and public policy," Chapters,in: The New Economic Analysis of Multinationals, chapter 7 Edward Elgar Publishing.
    5. Alan M Rugman, 1976. "Risk Reduction by International Diversification," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 7(2), pages 75-80, June.
    6. Alan M Rugman & Alain Verbeke, 1992. "A Note on the Transnational Solution and the Transaction Cost Theory of Multinational Strategic Management," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 23(4), pages 761-771, December.
    7. Rugman, Alan & Girod, Stéphane, 2003. "Retail Multinationals and Globalization:: The Evidence is Regional," European Management Journal, Elsevier, vol. 21(1), pages 24-37, February.
    8. J H Dunning & G Norman, 1987. "The location choice of offices of international companies," Environment and Planning A, Pion Ltd, London, vol. 19(5), pages 613-631, May.
    9. Pomfret, Richard, 2001. "The Economics of Regional Trading Arrangements," OUP Catalogue, Oxford University Press, number 9780199248872.
    10. J H Dunning & G Norman, 1987. "The Location Choice of Offices of International Companies," Environment and Planning A, , vol. 19(5), pages 613-631, May.
    11. Bruce Kogut & Nalin Kulatilaka, 1994. "Operating Flexibility, Global Manufacturing, and the Option Value of a Multinational Network," Management Science, INFORMS, vol. 40(1), pages 123-139, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Campa, Jose & Goldberg, Linda S., 1995. "Investment in manufacturing, exchange rates and external exposure," Journal of International Economics, Elsevier, pages 297-320.
    2. Abdulkadir Abdulrashid Rafindadi & Zarinah Yusof, 2015. "Are Linear and Nonlinear Exchange Rate Exposures Aggravating Agents to Corporate Bankruptcy in Nigeria? New Evidence from the “U” Test Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 5(1), pages 212-229.
    3. Abdul Rashid, 2010. "The Economic Exchange Rate Exposure: Evidence for a Small Open Economy," The IUP Journal of Monetary Economics, IUP Publications, vol. 0(4), pages 46-58, November.
    4. Bahar Erdal, 2001. "Investment Decisions under Real Exchange Rate Uncertainty," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 1(1), pages 25-47.
    5. Söhnke M. Bartram & Gordon M. Bodnar, 2007. "The exchange rate exposure puzzle," Managerial Finance, Emerald Group Publishing, vol. 33(9), pages 642-666, August.
    6. Haytem Ahmed Troug & Rashid Sbia, 2015. "The Relationship between Banking Competition and Stability in Developing Countries: The Case of Libya," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 772-779.
    7. Muller, Aline & Verschoor, Willem F.C., 2006. "Foreign exchange risk exposure: Survey and suggestions," Journal of Multinational Financial Management, Elsevier, vol. 16(4), pages 385-410, October.
    8. repec:eee:riibaf:v:42:y:2017:i:c:p:454-467 is not listed on IDEAS
    9. Ahmed A. El-Masry, 2004. "The Exchange Rate Exposure of UK Nonfinancial Companies: Industry-Level Analysis," International Finance 0401001, EconWPA.
    10. Chortareas, Georgios & Cipollini, Andrea & Eissa, Mohamed Abdelaziz, 2012. "Switching to floating exchange rates, devaluations, and stock returns in MENA countries," International Review of Financial Analysis, Elsevier, vol. 21(C), pages 119-127.
    11. Boehe, Dirk Michael, 2014. "Strategic hedging: Evidence from Brazilian exporters," Journal of World Business, Elsevier, vol. 49(3), pages 290-300.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jintbs:v:22:y:1991:i:4:p:619-649. See general 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: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.palgrave-journals.com/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.