Exchange Rate Exposure and Competition

Journal of Financial Economics 59 (2001) 441}475 supersede follow in exposure and competition: evidence from the automotive sedulousness Rohan Williamson* McDonough School of Business, Georgetown University, Washington, DC 20057, USA Received 20 April 1998; current in revise form 6 January 2000 Abstract This try examines the e! electroshock of real rallying sum up changes on multinational rms and incorporates the e!ect of intra-industry competition on the coitus between exchange rates and rm value. To test the relation more e!ectively, tests are conducted using a attempt 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 organism a major determina tive of exposure and the e!ectiveness of running(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; money exposure; International corporate nance I would kindred 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 especially gra teful for the invaluable comments and sugges! tions from Rene Stulz and H the referee. Also, I would like to thank seminar participants at the 1997 Western pay tie-up meetings, The Third International Finance Conference at gallium 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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