scholarly journals Exchange Rate Movements, Firm-Level Exports and Heterogeneity

2018 ◽  
Author(s):  
Antoine Berthou ◽  
Emmanuel Dhyne
Keyword(s):  
Exchange Rate ◽  
Firm Level ◽  
Exchange Rate Movements

Exchange Rates and Firm Exports: The Role of Foreign Ownership and Foreign Subsidiaries

2020 ◽  
Vol 19 (2) ◽  
pp. 103-118
Author(s):  
Hyelin Choi ◽  
Hyo Sang Kim
Keyword(s):  
Exchange Rate ◽  
Value Chain ◽  
Foreign Ownership ◽  
Foreign Subsidiaries ◽  
Firm Level ◽  
Level Data ◽  
Exchange Rate Movements ◽  
Negative Effect ◽  
Firm Exports

This paper examines the role of global production linkages on exchange rate elasticities by using Korean firm-level data. Firms with foreign ownership or with foreign subsidiaries, which are linked to global production, tend to weaken the effects of exchange rate movements on firm exports. We find the exchange rate elasticities of firm exports are significant and tend to have a negative effect on domestic firms or firms with no foreign subsidiary. In contrast, the results show an insignificant effect on foreign-owned firms or firms with foreign subsidiaries. After controlling for the export to foreign affiliates, we still find the estimated exchange rate elasticities of exports to be statistically insignificant, although it has a negative and relatively large impact for firms with global production linkages. Moreover, firms with a higher global value chain integration measure or more imported intermediate inputs have a significantly lower exchange rate elasticity of exports. This indicates that the developments in global production linkages have an important role in explaining lower exchange rate elasticity to exports.

scholarly journals Exchange Rates and Monetary Fundamentals: What Do We Learn from Linear and Nonlinear Regressions?

2014 ◽  
Vol 2014 ◽  
pp. 1-14 ◽  
Author(s):  
Guangfeng Zhang
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Correction Model ◽  
Exchange Rate Dynamics ◽  
Long Run ◽  
Exchange Rate Movements ◽  
Short Run ◽  
Us Dollar ◽  
Linear And Nonlinear ◽  
Japanese Yen

This paper revisits the association between exchange rates and monetary fundamentals with the focus on both linear and nonlinear approaches. With the monthly data of Euro/US dollar and Japanese yen/US dollar, our linear analysis demonstrates the monetary model is a long-run description of exchange rate movements, and our nonlinear modelling suggests the error correction model describes the short-run adjustment of deviations of exchange rates, and monetary fundamentals are capable of explaining exchange rate dynamics under an unrestricted framework.

Factors Determining the Exchange Rate Exposure of Firms: Evidence from India

2021 ◽  
pp. 227853372110337
Author(s):  
Zakiya Begum Sayed ◽  
J. Gayathri
Keyword(s):  
Exchange Rate ◽  
Multinomial Logistic Regression ◽  
Exchange Rate Volatility ◽  
Strategic Decision ◽  
Firm Level ◽  
Factors Affecting ◽  
Business Operations ◽  
Industrial Sectors ◽  
Exchange Rate Exposure ◽  
The Exchange Rate

Exchange rate exposure is a strategic decision in finance and risk management at both the micro and macro level of business operations. Literature on the measurement, and management of this risk, has had no consensus on the factors affecting it as these factors seem to be dynamic. In an effort to consider a comprehensive study at the firm level, this article examines the exchange rate exposure of 271 constituent firms from the BSE S&P 500 index. The study period was 2001 to 2020 divided into sub-periods around the financial crises of 2008. The study uses two contemporary approaches (the capital market approach and the cash flow approach) and five relevant exchange rates (USD, EURO, GBP, JPY, and REER) to measure the foreign exchange. The sample firms were divided into 10 industrial sectors to identify the factors that lead to exposure of firms to exchange rate volatility. We use multinomial logistic regression to regress the select factors with the measured value of exchange rate exposure. The findings of the article suggest that multinationality, fixed asset utilization ratio, hedging activities, industrial sectors, size, and age of the firms are the significant determinants of such exposure. The results varied during the sub-periods and across industries.

scholarly journals Exchange Rate, Uncertainty and Foreign Direct Investment Inflow in West African Monetary Zone

2018 ◽  
Vol 20 (1) ◽  
pp. 1-12 ◽  
Author(s):  
Perekunah B. Eregha
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Direct Investment ◽  
Exchange Rate Volatility ◽  
Commodity Prices ◽  
Fixed Effect Model ◽  
West African ◽  
Effect Model ◽  
Exchange Rate Movements ◽  
Global Shocks

Exchange-rate movements are mostly unpredictable, and this tends to affect both trade and foreign investment flows. This is because foreign investors are unclear on the returns to investment decisions in such cases. Hence, this study examines the effect of exchange rate, its volatility and uncertainty on foreign direct investment (FDI) inflow in West African monetary zone (WAMZ). The study covers the period1980–2014, and the within estimator for the fixed effect model is employed. The study accounts for both exchange rate volatility and uncertainty measures which are anticipated and unanticipated exchange rate innovations measures, respectively. The results show that exchange-rate movements in WAMZ countries are more of unanticipated than anticipated innovations in affecting FDI inflow. Therefore, policies aimed at targeting exchange-rate stability are essential in the WAMZ countries since investors are profit maximizers; hence, investment uncertainties must be kept as low as possible. Also since WAMZ export sectors are primary products based, policies should be geared towards the diversification of the export sectors to combat unanticipated global shocks from commodity prices movement in having an effect on the exchange rate through the foreign exchange reserve channel.

Sign in / Sign up

Export Citation Format

Share Document