Research on Foreign Exchange Exposure of Enterprises in China: Taking Manufacturing Multinational Enterprises as an Example

Authors

Qinghong Shuai, Southwestern University of Finance and Economics, ChinaFollow
Yu Tang, Southwestern University of Finance and Economics, ChinaFollow
Hongxin Hu, Southwestern University of Finance and Economics, ChinaFollow
Chenchen Xiong, Southwestern University of Finance and Economics, ChinaFollow

Corresponding Author

Yu Tang

Document Type

Article

Abstract

This study measures the exposure of sample corporates to the three types of foreign exchange and then determines factors affecting foreign exchange exposure through the cross-sectional regression model. The study finds: Firstly, the proportion of samples with significant foreign exchange exposure is about 50.79%, while the EUR exposure accounts for the highest proportion at 23.91%, and the USD exposure possess the lowest proportion at 10.08%; Secondly, the average of absolute value of USD exposure is the largest, suggesting that USD exchange rate fluctuations has a greater impact on the corporate values, compared to the EUR and the JPY. Finally, the corporate's scale is significantly positively correlated with the USD exposure, and the corporate's leverage level is significantly positively correlated with the EUR exposure.

Recommended Citation

Shuai, Qinghong; Tang, Yu; Hu, Hongxin; and Xiong, Chenchen, "Research on Foreign Exchange Exposure of Enterprises in China: Taking Manufacturing Multinational Enterprises as an Example" (2018). ICEB 2018 Proceedings (Guilin, China). 50.
https://aisel.aisnet.org/iceb2018/50