CURRENCY RISK AND ITS EFFECT ON PERFORMANCE AND PERMANENCE OF COMPANIES IN MEXICALI, BAJA CALIFORNIA, EL RIESGO CAMBIARIO Y SU EFECTO EN EL DESEMPEÑO Y PERMANENCIA DE LAS EMPRESAS EN MEXICALI, BAJA CALIFORNIA

Sósima Carrillo, Loreto María Bravo Zanoguera, Plácido Valenciana Moreno, Ana Cecilia Bustamante Valenzuela and Jessica Lizbeth Cisneros Martínez

Revista Global de Negocios, 2017, vol. 5, issue 1, 39-51

Abstract: This research aims to determine how currency risk affects the performance of commercial companies engaged in the sale of women's clothing, located in the city of Mexicali, Baja California. This industry is affected by rising dollar prices, a situation that impacts businesses located in this city because a significant portion of its operations are conducted in that currency. Doing so allows steady imports of inventories, which are essential for companies to remain in the market. The research design is descriptive, not experimental and transversal. A questionnaire was submitted to statistical tests through Cronbach's alpha to determine its reliability. Results show when the dollar value changes, the first reaction of companies is to increase their prices without analyzing the behavior of their competitors. They reducing their purchases and in some cases search other options for supplying their products in the domestic market. Additionally, these companies do not have any hedges to protect against this type of economic events, which affects liquidity and endangers its permanence.

Keywords: Currency Risk; Performance and Permanence (search for similar items in EconPapers)
JEL-codes: G00 (search for similar items in EconPapers)
Date: 2017
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