Economics of Exposure Management of Foreign Subsidiaries of Multinational Corporations

Clas Wihlborg

Journal of International Business Studies, 1980, vol. 11, issue 3, 9-18

Abstract: The economic exposure of financial assets and liabilities of a foreign subsidiary depends mainly on the currency denomination and the commodity composition of future transactions. Country of residency of shareholders and parent corporations are of secondary interest. Accordingly, management of exposure presumes information about the denomination of future cash flows and future purchases. The decision on whether to centralize or decentralize exposure management must take into account the costs of collecting relevant information of this kind at different degrees of centralization.© 1980 JIBS. Journal of International Business Studies (1980) 11, 9–18

Date: 1980
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