The Effects of Industry Structure on Economic Exposure

R.C. Marston

Weiss Center Working Papers from Wharton School - Weiss Center for International Financial Research

Abstract: A firm is subject to "economic exposure" if changes in exchange rates affect the firm's value, as measured by the present value of its future cash flows. This paper shows that in many forms of competition, including the most commonly studied case of monopoly, the economic exposure of an exporting firm is simply proportional to the firm's net revenues based in foreign currency.

Keywords: INDUSTRY; ENTERPRISES; EXCHANGE RATE; UNCERTAINTY; FINANCIAL MARKET (search for similar items in EconPapers)
JEL-codes: D80 D81 F30 F31 L12 (search for similar items in EconPapers)
Pages: 25 pages
Date: 1996
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:pennif:96-3

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