Market Liberalization and Exchange-Rate Exposure: The Case of Taiwanese Exporting Firms

Chaoshin Chiao (), Ken Hung () and Gladson I. Nwanna ()
Additional contact information
Chaoshin Chiao: National Dong Hwa University - Department of Finance, Postal: No. 1, Sec. 2, Da Hsueh Rd., Shoufeng, Hualien 97401,Taiwan, R.O.C., http://www.ndhu.edu.tw/
Ken Hung: National Dong Hwa University - Department of Finance, Postal: No. 1, Sec. 2, Da Hsueh Rd., Shoufeng, Hualien 97401,Taiwan, R.O.C., http://www.ndhu.edu.tw/
Gladson I. Nwanna: Morgan State University Earl G. Graves School of Business & Management, Postal: 1700 East Cold Spring Lane, Baltimore, MD 21251, USA, http://www.morgan.edu/

Economia Internazionale / International Economics, 2001, vol. 54, issue 2, 137-161

Abstract: This paper examines the effects of market liberalization on exchange-rate exposure of exporting firms and its possible time-varying nature. Using Taiwanese exporting firms as a test case, particularly, we consider the effects of the timing of the three liberalization events through which the government of Taiwan carried out explicit policies to open gradually its foreign exchange and stock markets. We find that the timing of the three liberalization events greatly affects the exchange-rate exposure of Taiwanese exporting firms. We also observe the determinants of possible time-varying exchange-rate exposure of exporting firms are the exports-to-sales ratio, firm size, and the timing of the three liberalization events.

Keywords: Exchange-rate exposure; time-varying exchange-rate exposure (search for similar items in EconPapers)
JEL-codes: G12 N25 O16 (search for similar items in EconPapers)
Date: 2001
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