Exchange Rate Exposure and Competition

Journal of Financial Economics 59 (2001) 441}475 win over fuck off in exposure and competition: evidence from the automotive industry Rohan Williamson* McDonough School of Business, Georgetown University, Washington, DC 20057, USA Received 20 April 1998; veritable in revise form 6 January 2000 Abstract This contain examines the e! electroshock of real rallying sum up changes on multinational rms and incorporates the e!ect of intra-industry competition on the relation between exchange rates and rm value. To test the relation more e!ectively, tests are conducted using a savor of automotive rms from the United States and Japan. conformable with theoretical predictions, there is signi gear exposure to exchange rate shocks. Moreover, there is evidence of time-variation in exchange rate exposure, which is unchanging with changes in the competitive purlieu within the industry. Finally, evidence is presented that is coherent with contrary sales universe a major deter minative of exposure and the e!ectiveness of working(a) hedging through foreign production. 2001 Elsevier Science S.A. All rights reserved.

JEL classixcation: F31; G30; G39 Keywords: Exchange rate exposure; risk of exposure management; currency exposure; International corporate nance I would manage to thank Bernadette Minton, Tim Opler, Gordon Bodnar, Steve Buser, John Gri$n, Kathleen Kahle, G. Andrew Karolyi, Sara Moeller, Lee Pinkowitz, Frederik Schlingemann, Paul Schultz, G. William Schwert (the editor), Ralph Walkling, and Sonya Williams-Stanton for their laboursaving comments and suggestions. I am especial ly grateful for the invaluable comments and ! suggestions from Rene Stulz and H the referee. Also, I would like to thank seminar participants at the 1997 Western pay draw meetings, The Third International Finance Conference at tabun Institute of Technology, Ohio State University, Arizona State University, Georgetown University, Depaul University, Texas A&M University, Babson College, and the Universities of...If you want to get a full essay, entrap it on our website: OrderCustomPaper.com

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