IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-03949044.html

Invoicing Currency and Financial Hedging

Author

Listed:
  • Victor Lyonnet

    (OSU - The Ohio State University [Columbus])

  • Julien Martin

    (UQAM - Université du Québec à Montréal = University of Québec in Montréal)

  • Isabelle Mejean

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research)

Abstract

We examine the link between exporters' currency choices and their use of financial hedging instruments. Large firms are more likely to use hedging instruments, especially those pricing in a foreign currency. We provide suggestive evidence that access to hedging instruments increases the probability of pricing in a foreign currency. A model of invoicing currency choice augmented with hedging can rationalize these facts. In the model, large firms that would have chosen to price in their own currency in the absence of hedging instruments can decide to set prices in a foreign currency if they have access to such instruments.

Suggested Citation

  • Victor Lyonnet & Julien Martin & Isabelle Mejean, 2022. "Invoicing Currency and Financial Hedging," Post-Print hal-03949044, HAL.
    • Handle: RePEc:hal:journl:hal-03949044
    DOI: 10.1111/jmcb.12966
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Malik Curuk & Jérôme Héricourt & Gonzague Vannoorenberghe, 2025. "Labor Market Power, Export Prices and Pass-through," Working Papers 2025-15, CEPII research center.
    2. Lee, Kwan Yong & Naknoi, Kanda, 2024. "Exchange rates, invoicing currencies and the margins of exports," Journal of International Money and Finance, Elsevier, vol. 141(C).
    3. Marco Garofalo & Giovanni Rosso & Roger Vicquéry, 2024. "Dominant Currency Pricing Transition," Economics Series Working Papers 1044, University of Oxford, Department of Economics.
    4. Antoine Berthou & Guillaume Horny & Jean-Stéphane Mésonnier, 2018. "Dollar Funding and Firm-Level Exports," Working papers 666, Banque de France.
    5. Héricourt, Jérôme & Nedoncelle, Clément, 2018. "Multi-destination firms and the impact of exchange-rate risk on trade," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 1178-1193.
    6. Jérôme Héricourt & Clément Nedoncelle, 2016. "How Multi-Destination Firms Shape the Effect of Exchange Rate Volatility on Trade: Micro Evidence and Aggregate Implications," Working Papers 2016-05, CEPII research center.
    7. Benguria, Felipe & Wagner, Rodrigo, 2024. "Trade invoicing currencies and exchange rate pass-through: The introduction of the euro as a natural experiment," Journal of International Economics, Elsevier, vol. 150(C).
    8. Berthou, Antoine & Horny, Guillaume & Mésonnier, Jean-Stéphane, 2022. "The real effects of invoicing exports in dollars," Journal of International Economics, Elsevier, vol. 135(C).
    9. Varela, Liliana & Alfaro, Laura & Calani, Mauricio, 2021. "Granular Corporate Hedging Under Dominant Currency," CEPR Discussion Papers 16232, C.E.P.R. Discussion Papers.
    10. Martin Ertl & Adrian Wende, 2025. "FIW PB-71 Exchange rate effects on Austrian exports," FIW Policy Brief series 71, FIW.
    11. Nuwat Nookhwun & Jettawat Pattararangrong & Phurichai Rungcharoenkitkul, 2025. "Exchange Rate Effects on Firm Performance: A NICER Approach," BIS Working Papers 1266, Bank for International Settlements.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • F1 - International Economics - - Trade
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

    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:hal:journl:hal-03949044. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.