Premium
Exchange rate exposure, foreign involvement and currency hedging of firms: some Swedish evidence
Author(s) -
Nydahl* Stefan
Publication year - 1999
Publication title -
european financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.311
H-Index - 64
eISSN - 1468-036X
pISSN - 1354-7798
DOI - 10.1111/1468-036x.00091
Subject(s) - currency , monetary economics , exchange rate , foreign exchange risk , foreign exchange , business , economics , foreign exchange market , international economics
This paper investigates the effect of exchange rate fluctuation on a firm’s value, the so‐called exchange rate exposure, for a sample of Swedish firms. In contrast to previous results, using U.S. data, the values of Swedish firms, as reflected in the stock price, seem quite sensitive to movements in the exchange rate. Studying the cross sectional differences in exposure, the estimated exposure is positively and significantly related to the fractional of total sales made abroad and negatively related to the use of currency derivatives. F30, G10