This paper presents a model of a competitive exporting firm confronting multiple currency risks. Future markets do not exist for the firm's own currency, but do exist between currencies of two countries to which the firm exports its entire output. We provide analytical insight into optimal...

This paper places the competitive firm a la Sandom in a standard efficiency wage model, wherein the work effort of labor depends on the wage rate set by the firm. Irrespective of the availability of hedging opportunities, we show that the Solow condition under which the equilibrium effort-wage...

This paper presents a model of a risk-averse multinational firm under exchange rate risk. The firm, which owns and controls assets in two countries, is engaged in foreign production, sales, and foreign currency forward contracting. The implications of the existence of forward markets in global...

Given a commercial banking firm facing credit risk we develop a dynamic hedging model where the bank management can use credit derivatives. In a continuous-time framework optimal hedging strategies, deposit and loan decisions and consumption are studied. It is shown that the optimal hedge ratio...

This paper presents a theoretical model of lending which emphasizes the role of asymmetric information and total debt service obligations between creditors and debtors. The analytical approach is based upon that of Stiglitz and Weiss (1981); however, emphasis here is placed upon collateral...

The paper examines theoretically the empirical observation or increasing levels of intra-industrial trade flows. The relationship between intra-industrial trade and consumer preferences in addition to product differentiation advanced by internationally active firms are discussed within the...

The approach focussed on allows one to examine theoretically the empirical observation of increasing levels of intra-industry trade flows founded upon an increasing similarity of technology between countries and firms. Within the framework of a simple model of international trade in...