Economic Exchange Rate Exposure of U.S.-Based MNCs Operating in Europe

Anna D Martin, Jeff Madura and Aigbe Akhigbe

The Financial Review, 1999, vol. 34, issue 2, 21-36

Abstract: 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. Copyright 1999 by MIT Press.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:bla:finrev:v:34:y:1999:i:2:p:21-36

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