Corporate financial policies and the exchange rate regime: Evidence from Brazil

José Luiz Rossi
Authors registered in the RePEc Author Service: Jose Luiz Rossi and Jose Luiz Rossi, Jr.

Emerging Markets Review, 2009, vol. 10, issue 4, 279-295

Abstract: This paper analyzes the relationship between companies' financial policies and the exchange rate regime for a sample of non-financial Brazilian companies from 1996 to 2006. The adoption of a floating exchange rate regime is shown to improve the match between the currency composition of companies' assets and liabilities. The paper also shows that this reduction in companies' currency mismatches is more pronounced for companies in the highest quantile of foreign exposure; therefore the results confirm that the exchange rate regime plays an important role in the determination of companies' foreign vulnerability.

Keywords: Debt; composition; Hedging; Use; of; derivatives; Exposure; Exchange; rate; regime (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Working Paper: Corporate Financial Policies and the Exchange Rate Regime: Evidence from Brazil (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:10:y:2009:i:4:p:279-295

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