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Exchange Rate Exposures and Strategies of Industrial Companies: An Empirical Study
Author(s) -
Aabo Tom
Publication year - 2001
Publication title -
thunderbird international business review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.553
H-Index - 37
eISSN - 1520-6874
pISSN - 1096-4762
DOI - 10.1002/tie.1003
Subject(s) - stock exchange , industrial organization , economics , business , empirical research , exchange rate , financial economics , relation (database) , monetary economics , finance , computer science , philosophy , epistemology , database
This article investigates empirically the potential and actual exchange rate exposure strategies of industrial companies in relation to identifying and quantifying the neutral financial positions in an optimal hedging strategy. A stock market approach as a potential remedy is analyzed but found to be statistically troublesome and fundamentally flawed. Part of the diversity in actual strategies found in this article reflects different competitive environments, while another part indicates that the companies have not yet reached a systematic risk management of ongoing competitive exposures. © 2001 John Wiley & Sons, Inc.