Premium
Economic Exchange Rate Exposure of U.S.‐Based MNCs Operating in Europe
Author(s) -
Martin Anna D.,
Madura Jeff,
Akhigbe Aigbe
Publication year - 1999
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.1999.tb00452.x
Subject(s) - multinational corporation , exchange rate , business , monetary economics , economics , finance
This study focuses on the economic exchange rate exposure of 168 U.S.‐based multinational corporations (MNCs) with foreign operations primarily in Europe. The sampling plan and other refinements may improve the estimation of exposure and detection of relevant determinants. Operating characteristics that represent economic exposure are evaluated for their ability, to explain cross‐sectional differences in exposure. More specifically, the degree of imbalance, which is a proxy for matching cash inflows and outflows, and proportion of export sales are able to explain differential exposure. Furthermore, shifts in the degree of imbalance and proportion of export sales are found to significantly explain shifts in exposure.