Product Durability and Exchange Rate Exposure in International Triopolies

A. Andrikopoulos, X. Dassiou and M. G. Tsionas

Working Papers from Department of Economics, City University London

Abstract: We explore the impact of foreign exchange rates on the profits and stock prices of firms trading differentiated goods and operating under international triopolies. While previous work on exchange rate exposure has mainly focused on US firms, we instead use an international sample. We construct a group of durable goods producers which includes stock prices and profits from 60 durable goods-producing firms from 12 developed markets (Germany, Finland, France, Hong-Kong, Italy, Japan, Singapore, South-Korea, Sweden, Switzerland, United Kingdom and the United States) and three emerging markets (China, India and Taiwan). The time period is right after the breakdown of Bretton Woods (1973) until 2016. We also construct a group of consumable goods producers which includes stock prices and profits from 18 consumable goods-producing firms from eight developed markets; Belgium, Germany, France, Japan, Netherlands, Switzerland, United Kingdom and the United States. The sample period is 1984–2016. There are (no) significant differences between stock price and profit exposures for durable (consumable) goods-producing firms to real or bilateral exchange rates.

Keywords: Multinational firm; Foreign exchange exposure; International finance; Oligopoly (search for similar items in EconPapers)
Date: 2019
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