Fundamentals of corporate currency exposure

Thomas J. O'Brien

Journal of International Financial Markets, Institutions and Money, 2010, vol. 20, issue 3, 310-321

Abstract: I model the relation between corporate currency exposure and fundamental variables like demand elasticities and operating cost structure. The currency location of a firm's operating costs may be in the home currency, the foreign currency, or partially in each. I start with a single-firm setting and extend the results to a competitive setting. The model should help managers better understand the determinants of currency exposure and thus better perform the important tasks of strategic planning and managing enterprise risk.

Keywords: Currency; exposure; Demand; elasticity; Operating; costs; Competition; Exchange; rate (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:20:y:2010:i:3:p:310-321

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