Does the Market Evaluate Firm`s FX Risk Management? -Evidence from the Korean Stock Market-

Doyeon Kim and Taeyoon Sung
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Doyeon Kim: KAIST Graduate School of Management

Korean Economic Review, 2007, vol. 23, 243-266

Abstract: We examine the influence of FX Risk on the Korean stock market. We find that, except the period when the Korean government maintained the fixed exchange rate regime, FX Risk had a significant influence on firm value in the Korean stock market. FX Risk exposure turns out to be significantly different among firms. Particularly, we show that large firms tend to be more sensitive to FX Risk and have more incentives to control the risk.

Keywords: Foreign Exchange; FX Risk; Risk Management; Firm Size; Stock Market (search for similar items in EconPapers)
JEL-codes: F31 G15 (search for similar items in EconPapers)
Date: 2007
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