Abstract
This paper provides new evidence on the issue of whether or not there is a contemporaneous relation between the dollar and firm value as measured with stock returns. Prior studies have failed to find any short-term relation between the value of the dollar and the stock price reactions of U.S. multinational firms. Using a different methodology than previous studies, we find a significant average negative drop in stock price across 430 firms on the day that Thailand devalued the bhat, initiating Asia’s financial crisis. We also show that this measure of exposure is related to both firm size and several proxies for intensity of foreign and Asian operations.
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© 2005 Springer Berlin · Heidelberg
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Dewenter, K.L., Higgins, R.C., Simin, T.T. (2005). Estimating the Exchange Rate Exposure of US Multinational Firms: Evidence from an Event Study Methodology. In: Frenkel, M., Rudolf, M., Hommel, U. (eds) Risk Management. Springer, Berlin, Heidelberg. https://doi.org/10.1007/3-540-26993-2_28
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DOI: https://doi.org/10.1007/3-540-26993-2_28
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-22682-6
Online ISBN: 978-3-540-26993-9
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