Exchange rate regimes and foreign exchange exposure: The case of emerging market firms

Ye, Min; Hutson, Elaine; Muckley, Cal B.

doi:10.1016/j.ememar.2014.09.001

Cited by 35 publications

(32 citation statements)

References 67 publications

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“…For instance, it has a negative impact on the cash flow in the textile industry in the Istanbul market (Akay & Cifter, 2014). In another study, using quick ratio rather than cash flow, the measurement is insignificant to explain foreign exchange exposure in emerging markets (Ye, Hutson, & Muckley, 2014).…”

Section: Industry Factorsmentioning

confidence: 98%

“…Lastly, concerning firms' characteristics, total debt has also been employed to measure firms' probability of distress. A higher debt ratio towards higher foreign exchange exposure in firms with international business implies a higher possibility that firms use hedging instrument (Geczy, Minton, & Schrand, 1997;He & Ng, 1998;Ye et al, 2014). Therefore, there is a negative relationship between debt ratio and foreign currency exposure (Akay & Cifter, 2014).…”

Section: Industry Factorsmentioning

confidence: 99%

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Exchange Rate Exposure and Crude Oil Price: The Case of an Emerging Market

Hong¹,

Chu²,

Song³

2018

AAMJAF

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The purpose of this study is to examine the depreciation of USD and crude oil price on exchange rate exposure in Malaysia. Based on the argument that domestic and foreign markets could affect foreign exchange exposure, the study examined 993 public listed firms that involved in domestic business, foreign sales, and assets, respectively. The sample period of 2014 to 2016 illustrates different time-varying conditions when the depreciation of Ringgit Malaysia and crude oil price were the most severe for the last decades. The findings show that firms with foreign sales face the most significant negative exposure of foreign exchange, followed by domestic firms and firms with foreign assets. The study shows that many Malaysia export firms are not effective in hedging, hence, they did not benefit from the depreciation of Ringgit Malaysia and crude oil price. The study concludes that there is an influence of domestic and foreign market effects on foreign currency exposure in the economy.

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Section: Industry Factorsmentioning

confidence: 98%

Section: Industry Factorsmentioning

confidence: 99%

Exchange Rate Exposure and Crude Oil Price: The Case of an Emerging Market

Hong¹,

Chu²,

Song³

2018

AAMJAF

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“…Therefore, the answers to the first two research questions are affirmative. Regarding the third research issue, the authors have determined that the exchange rate regime is a statistically significant determinant of companies' exposure to currency risk (see more in: Ye, Hutson & Muckley, 2014).…”

Section: The Impact Of Ambient Factors On the Company's Exposure To Tmentioning

confidence: 99%

Currency Risk Exposure and Its Determinants: Theoretical and Empirical Research

Pobrić

2019

ACE

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The study investigates the currency risk exposure ofcompanies. The author presents relevant theoreticalknowledge and the results of empirical research of thecurrency risk exposure of companies and its determinants.Theoretical viewpoints on the impact of companycharacteristics and ambient factors on the currency riskexposure of companies are consistent. In empirical research,theoretical attitudes about the impact of ambientfactors on the currency risk exposure of companies havebeen confirmed, whereas theoretical attitudes on theimpact of company characteristics have not been confirmedor not confirmed in a sufficient number of empiricalstudies. Based on the obtained results of empiricalresearch, it is not possible to conclude with certaintywhich characteristics of the company affect the currencyrisk exposure of companies.

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“…Despite the fact that theory advocate the negative association between exchange rate unpredictability and foreign trade (see for example, Hung Yip & Nguyen, 2012;Hutson & Laing, 2014), the studies put forward that this hypothetical argument may not generally be valid (Al-Shboul & Anwar, 2014;Krapl & Salyer, 2017;Ye, Hutson, & Muckley, 2014). Slavtcheva (2015), Ye, Hutson, & Muckley (2014) show that such influence depends on the norms of forwarding markets, hedging tools, firms structure, risk preferences and degree of financial integration. Al-Shboul & Anwar (2014), Hung Yip & Nguyen (2012) suggest that if a sound forward market is present and the organization has a clear vision on the revenues in the future exchange rate, the situation should be different, the size of trade will not be disturbed.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The researchers found a negative impact of exchange rate volatility to real exports (Aghion, Bacchetta, Ranciè Re, & Rogoff, 2009;Chi & Cheng, 2016;Ouyang et al, 2016;Wong & Lee, 2016). Despite the fact that theory advocate the negative association between exchange rate unpredictability and foreign trade (see for example, Hung Yip & Nguyen, 2012;Hutson & Laing, 2014), the studies put forward that this hypothetical argument may not generally be valid (Al-Shboul & Anwar, 2014;Krapl & Salyer, 2017;Ye, Hutson, & Muckley, 2014). Slavtcheva (2015), Ye, Hutson, & Muckley (2014) show that such influence depends on the norms of forwarding markets, hedging tools, firms structure, risk preferences and degree of financial integration.…”

Section: Literature Reviewmentioning

confidence: 99%

Exchange rate volatility and financial performance of agriculture firms in Malaysia: An empirical analysis using GARCH, wavelet and system GMM

Reaz¹,

Mahat²,

Dahir³

et al. 2017

BEH

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The insurgence of exchange rate volatility over the years has gained the attention of not only scholars but also policy makers around the world. This paper investigates the influence of exchange rate volatility to the financial performance of agriculture firms in Malaysia. Authors use the system GMM dynamic panel techniques, wavelet coherence technique and GARCH (1, 1) for the period of 2001 and 2015. The findings show that the volatility of exchange rate of Malaysian Ringgit (RM) has a negative impact on the financial performance of agriculture firms in Malaysia. The ARME and AVA demonstrate a positive impact on the financial performance at 1% significance level for the full sample. The findings also reveal that financial performance, exchange rate, consumer price index, and interest rate comove while using the wavelet coherence.

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Exchange rate regimes and foreign exchange exposure: The case of emerging market firms

Cited by 35 publications

References 67 publications

Exchange Rate Exposure and Crude Oil Price: The Case of an Emerging Market

Exchange Rate Exposure and Crude Oil Price: The Case of an Emerging Market

Currency Risk Exposure and Its Determinants: Theoretical and Empirical Research

Exchange rate volatility and financial performance of agriculture firms in Malaysia: An empirical analysis using GARCH, wavelet and system GMM

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