TY - JOUR
T1 - Foreign exchange risk exposure: Survey and suggestions
AU - Muller, Aline
AU - Verschoor, Willem F.C.
PY - 2006/10/19
Y1 - 2006/10/19
N2 - Assessing the sensitivity of firm value to exchange rate changes has been one of the most challenging issues in international financial management over the last two decades. This paper reviews the rapidly growing exchange exposure literature, with particular reference to recent developments. The studies reviewed focus on two primary areas of inquiry: the theoretical foundations of exchange risk exposure and the empirical evidence on the link between stock returns and currency fluctuations. Although much has been learned in each field, this survey highlights the areas of research in which our understanding of the mechanism of exchange exposure is still incomplete.
AB - Assessing the sensitivity of firm value to exchange rate changes has been one of the most challenging issues in international financial management over the last two decades. This paper reviews the rapidly growing exchange exposure literature, with particular reference to recent developments. The studies reviewed focus on two primary areas of inquiry: the theoretical foundations of exchange risk exposure and the empirical evidence on the link between stock returns and currency fluctuations. Although much has been learned in each field, this survey highlights the areas of research in which our understanding of the mechanism of exchange exposure is still incomplete.
KW - Exchange risk exposure
KW - Multinational firms
KW - International finance
U2 - https://doi.org/10.1016/j.mulfin.2005.09.001
DO - https://doi.org/10.1016/j.mulfin.2005.09.001
M3 - Article
SN - 1042-444X
VL - 16
SP - 385
EP - 410
JO - Journal of Multinational Financial Management
JF - Journal of Multinational Financial Management
IS - 4
ER -