Prior empirical evidence on the stock price response of exposed firms to contemporaneous changes in exchange rates is weak. This paper avoids many problems encountered in previous work by using event-study methods to examine the daily stock price reactions of exposed U.S. multinationals to...

This paper estimates short horizon exchange rate sensitivity with an event study methodology. We look at stock price reactions to very large, unexpected exchange rate changes: the decisions to allow the Mexican peso and Thai baht to float. For both events, we find evidence of a statistically and...