The distinction between domicile and place of business is becoming more and more relevant as a growing number of firms have activities abroad. In most statistical studies of international stock returns, a firm is included in a country's index if its headquarters are located in that country. This...

Firms differ in the extent to which they "pass-through" changes in exchange rates into the prices they charge in foreign markets. They also differ in their "exposure" to exchange rates--the responsiveness of their profits to changes in exchange rates. Because pricing directly affects...