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Some Methodological Issues on Estimating Foreign Exchange Exposure of US Multinational Firms: Evidence from the Asian Crisis

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  • Sunghee Choi
  • Arthur T. Denzau

Abstract

This article asks whether sample specification of firm, period, and exchange rate matters in estimating foreign exchange exposure of US multinational firms. By sampling US firms that had Asian sales and assets from 1996 to 1998, we find that the firms' returns are more likely to be significantly exposed to the Asian-oriented exchange rate changes for the Asian crisis, when the exchange rate changes were unexpectedly sizable. Also, by examining firms' exposure in the share of Asian sales and assets, we find that the firms are more exposed as their operations are more involved in the Asian region.

Suggested Citation

  • Sunghee Choi & Arthur T. Denzau, 2007. "Some Methodological Issues on Estimating Foreign Exchange Exposure of US Multinational Firms: Evidence from the Asian Crisis," Global Economic Review, Taylor & Francis Journals, vol. 36(3), pages 217-227.
  • Handle: RePEc:taf:glecrv:v:36:y:2007:i:3:p:217-227
    DOI: 10.1080/12265080701561943
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    Cited by:

    1. Sunghee Choi, 2010. "Estimating Exchange Rate Exposure of Trade-intensive Firms: Application to Korean Oil-refiners and Petrochemicals," Global Economic Review, Taylor & Francis Journals, vol. 39(3), pages 327-348.

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