Exchange rate exposure, foreign involvement and currency hedging of firms: some Swedish evidence

Stefan Nydahl*

European Financial Management, 1999, vol. 5, issue 2, 241-257

Abstract: 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

Date: 1999
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