Transaction versus economic exposure: Which has greater cash flow consequences?

International Review of Economics and Finance

Volumn 12, Issue 4, 2003, Pages 437-449

  Martin, Anna D ^a   Mauer, Laurence J ^b  

^a FAIRFIELD UNIVERSITY   (United States)

^b ST JOHN'S UNIVERSITY   (United States)

Author keywords

Economic exposure; Exchange rate exposure; Transaction exposure

Indexed keywords

EID: 0344944207     PISSN: 10590560     EISSN: None     Source Type: Journal    
DOI: 10.1016/S1059-0560(03)00031-5     Document Type: Article

References (41)

1. Akaike H. Information theory and the extension of the maximum likelihood principle. In Petrov B.N. Csaki F. (Eds.), Second International Symposium on Information Theory (Budapest) 1973 267-281
2. Allayannis G. Ihrig J. Weston J.P. Exchange-rate hedging: Financial versus operational strategies American Economic Review 91 2001 391-395
3. Allayannis G. Weston J.P. The use of foreign currency derivatives and firm market value Review of Financial Studies 14 2001 243-276
4. Almon S. The distributed lag between capital appropriations and expenditures Econometrica 33 1965 178-196
5. Bal R. & Bartov E. 1995 How naive is the stock market's use of earnings information. Financial Research and Policy Working Paper Series, University of Rochester.
6. Bartov E. Bodnar G.M. Firm valuation, earnings expectations and the exchange-rate exposure effect Journal of Finance 49 1994 1755-1785
7. Bilson J. The speculative efficiency hypothesis Journal of Business 54 1981 435-451
8. Bodnar G.M. Hayt G.S. Marston R.C. 1998 Wharton survey of financial risk management by U.S. non-financial firms Financial Management 27 1998 70-91
9. Bodnar G.M. Hayt G.S. Marston R.C. Smithson C.W. Wharton survey of derivatives usage by U.S. non-financial firms Financial Management 24 1995 104-114
10. Bowen R.M. Borgstahler D. Daley L.A. The incremental information content of accruals versus cash flows Accounting Review 62 1987 723-747
11. Brown L.D. Earnings forecasting research: Its implications for capital market research International Journal of Forecasting 1993 295-320
12. Chambliss K. Madura J. Wright F. The changing risk profile of U.S.-based multinational corporations exposed to European Community markets Journal of Financial Research 17 1994 133-146
13. Choi J.J. Prasad A.M. Exchange risk sensitivity and its determinants: A firm and industry analysis Financial Management 24 1995 77-88
14. Chow E.H. Lee W.Y. Solt M.E. The exchange-rate risk exposure of asset returns Journal of Business 70 1997 105-123
15. Chow E.H. Lee W.Y. Solt M.E. The economic exposure of U.S. multinational firms Journal of Financial Research 20 1997 191-210
16. DeMarzo P.M. Duffie D. Corporate financial hedging with proprietary information Journal of Economic Theory 53 1991 261-286
17. Froot K.A. Scharfstein D.S. Stein J.C. Risk management: Coordinating corporate investment and financing policies Journal of Finance 48 1993 1629-1658
18. George A.M. Schroth C.W. Managing foreign exchange for competitive advantage Sloan Management Review 32 1991 105-116
19. He J. Ng L.K. The foreign exchange exposure of Japanese multinational corporations Journal of Finance 53 1998 733-753
20. Hodder J.E. Exposure to exchange-rate movements Journal of International Economics 13 1982 375-386
21. Jacque L.L. Management of foreign exchange risk: A review article Journal of International Business Studies 12 1981 81-101
22. Jorion P. The exchange-rate exposure of U.S. multinationals Journal of Business 63 1990 331-345
23. Jorion P. The pricing of exchange rate risk in the stock market Journal of Financial and Quantitative Analysis 26 1991 363-376
24. Lessard D.R. Lightstone J.B. Volatile exchange rates can put operations at risk Harvard Business Review 64 1986 61-76
25. Marshall A.P. Weetman P. Information asymmetry in disclosure of foreign exchange risk management: Can regulation be effective? Journal of Economics and Business 54 2002 31-53
26. Marston R.C. The effects of industry structure on economic exposure Journal of International Money and Finance 20 2001 149-164
27. Martin A.D. Madura J. Akhigbe A. Economic exchange rate exposure of U.S.-based MNCs operating in Europe Financial Review 34 1999 21-36
28. Martin A.D. Mauer L.J. Exchange rate exposure of U.S. banks: A cash flow-based methodology Journal of Banking and Finance 27 2003 851-865
29. Meese R.A. Rogoff K. Empirical exchange rate models of the seventies: Do they fit out of sample? Journal of International Economics 14 1983 3-24
30. Miller K.D. Reuer J.J. Firm strategy and economic exposure to exchange rate movements Journal of International Business Studies 29 1998 493-513
31. Mussa M. Empirical regularities in the behavior of exchange rates and theories of the foreign exchange market Carnegie-Rochester Conference Series on Public Policy 11 1979 9-54
32. Pantzalis C. Simkins B.J. Laux P. Operational hedges and the foreign exchange exposure of U.S. multinational corporations Journal of International Business Studies 32 2001 793-812
33. Pringle J.J. Managing foreign exchange exposure Journal of Applied Corporate Finance 1991 73-82
34. Pringle J.J. A look at indirect foreign currency exposure Journal of Applied Corporate Finance 1995 75-81
35. Pringle J.J. Connolly R.A. The nature and causes of foreign currency exposure Journal of Applied Corporate Finance 1993 61-72
36. Roulstone D.T. Effect of SEC financial reporting release no. 48 on derivative and market risk disclosures Accounting Horizons 13 1999 343-363
37. Shapiro A.C. Exchange rate changes, inflation, and the value of the multinational corporation Journal of Finance 30 1975 485-502
38. Smith C. Stulz R. The determinants of firms' hedging policies Journal of Financial and Quantitative Analysis 20 1985 391-402
39. Sundaram A.K. Black J.S. The environment and internal organization of multinational enterprises Academy of Management Review 17 1992 729-757
40. von Ungern-Sternberg T. von Weizsacker C.C. Strategic foreign exchange management Journal of Industrial Economics 38 1990 381-395
41. Walsh E.J. Operating income, exchange rate changes, and the value of the firm: An empirical analysis Journal of Accounting, Auditing, and Finance 9 1994 703-724