search query: @author Solt, M. E. / total: 6
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| Author: | Chow, E. H. Lee, W. Y. Solt, M. E. |
| Title: | The economic exposure of U.S. multinational firms |
| Journal: | Journal of Financial Research
1997 : SUMMER, VOL. 20:2, p. 191-210 |
| Index terms: | EXCHANGE RATES MULTINATIONAL COMPANIES COMPANIES BY SIZE |
| Language: | eng |
| Abstract: | This paper explores the variation in firm value associated with changes in exchange rates. Analyzing stock returns enables to document the existence of economic exposure in the sample of 213 U.S. multinational companies. If investors are prone to making systematic errors in estimating the relation between firm value and changes in the dollar in the near term , the effect of exchange rate changes on value can be discerned only from long-horizon stock returns. It was found that the statistical significance of exchange rate exposure increases with the length of the return horizon and that large/small firms are on average positively/negatively exposed to exchange rate changes across all horizons. The cross-sectional differences in the magnitude of exposure are related to firm size, but they are at best weakly related to the ratio of foreign sales to total sales. |
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