Strategic Management of Operating Exposure

Robert Grant and Luc Soenen

European Management Journal, 2004, vol. 22, issue 1, 53-62

Abstract: We identify operating exposure as the most important and difficult to manage component of exchange risk. Our model identifies three components of foreign exchange exposure: direct operating exposure, the market demand effect, and the competitive effect. The size and relative importance of these components depends critically upon international market structure and firm strategies. We derive implications for managing foreign exchange exposure.

Keywords: Exchange; rate; risk; Operating; exposure; Foreign; exchange; exposure (search for similar items in EconPapers)
Date: 2004
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