The Foreign Exchange Exposure Of Japanese Multinational Corporations  

Oleh:

Jia, He ; Lilian K. Ng

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 53 no. 2 (Apr. 1998), page 733-753.
Topik: Foreign exchange; Japan; multinational companies; companies in Japan; exchange-f
Fulltext: p 733.pdf (108.33KB)

Isi artikel

We find that about 25 percent of our sample of 171 Japanese multinationals’ stock returns experienced economically significant positive exposure effects for the period January 1979 to December 1993. The extent to which a firm is exposed to exchange-rate f luctuations can be explained by the level of its export ratio and by variables that are proxies for its hedging needs. Highly leveraged firms, or firms with low liquidity, tend to have smaller exposures. Foreign exposure is found to increase with firm size. We also find that keiretsu multinationals are more exposed to exchange-rate risk than nonkeiretsu firms.

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