If a firm invoices a transaction in a foreign currency, a delay of payment between the transaction date and the settlement date exposes the firm to exchange rate risk. In their income statements, firms report such exchange rate gains and losses, signaling their exposure to currency risk. Using...

This paper examines the optimal production, export allocation and hedging decisions of a risk-averse international firm that exports to several foreign markets with different currencies. The firm faces multiple exchange rate risks. Optimal decisions are analyzed under two scenarios. In the...

In this paper, I examine the exchange rate exposure of Hungarian enterprises from a financial stability perspective. In connection with the recent growth in FX loans to enterprises, the central bank assesses the vulnerability of the banks’ loan portfolio to changes in the exchange rate. To...

The presence of macroeconomic uncertainty poses potential and veritable risk to real sector activity. Thus, this study set out to examine how Non-traditional Export (NTE) firms in Ghana respond to macroeconomic uncertainty. The study conducts a survey on NTE firms in Ghana to elicit responses,...

Commensurate with the exponential growth in the dimensions of commercial activity across the world and the almost complete eradication of trade boundaries and barriers, there needs to be developed a comprehensive mathematical framework to support the empirically established features of foreign...

Wir untersuchen für ein internationales Unternehmen das Zusammenwirken von finanz- und realwirtschaftlichem Risikomanagement. Dies geschieht auf der Grundlage eines intertemporalen, stochastischen Entscheidungsmodells. Die gemeinsame Betrachtung von Devisen-Futures und Lagerhaltung bestätigt...

This paper investigates the impact of exchange rate fluctuations on the value of nonfinancial firms in Chile. Using a detailed dataset on firms' foreign activities, the potential determinants of the identified exposure are examined. Foreign exchange exposure depends on the levels of foreign...

Corporations are affected by increasing volatilities on foreign exchange markets. A response to this development was the creation of financial instruments, so called derivatives, in order to protect corporations from the effects of flexible exchange rates. To understand the included risks and to...

Unlike prior studies on foreign exchange risk that have focused on multinational companies, this paper documents that domestic companies face significant foreign exchange exposure. Indeed, we document that on average domestic company foreign exchange exposure is not significantly different from...

We use a sample of 269 UK non-financial firms to study the sensitivity of foreign exchange exposure, and its determinants, to the different estimation methods. The standard Jorion's model suggests that 14.93% (30.50%) of the firms in our sample are exposed directly or indirectly to the...