TY - JOUR
T1 - Exchange rate risk management
T2 - What can we learn from financial crises?
AU - Lan, Li Huei
AU - Chen, Chang Chih
AU - Chuang, Shuang Shii
N1 - Publisher Copyright:
© 2014 Elsevier B.V.
PY - 2015/2/1
Y1 - 2015/2/1
N2 - Since most present studies on exchange rate risk have pointed out that it does exist, firms need to hedge all currencies in use. However, by examining the discrepancy between cost-side and revenue-side exposures across two major financial crises for Taiwanese firms, we find that the exposure mainly comes from the revenue side during the subprime crisis, while that comes from the cost side during the Asian crisis. Our results offer an applicable implication that as long as the cost-based or revenue-based hedging strategy can acquire same hedging benefit and effectively reduce hedging cost.
AB - Since most present studies on exchange rate risk have pointed out that it does exist, firms need to hedge all currencies in use. However, by examining the discrepancy between cost-side and revenue-side exposures across two major financial crises for Taiwanese firms, we find that the exposure mainly comes from the revenue side during the subprime crisis, while that comes from the cost side during the Asian crisis. Our results offer an applicable implication that as long as the cost-based or revenue-based hedging strategy can acquire same hedging benefit and effectively reduce hedging cost.
UR - http://www.scopus.com/inward/record.url?scp=84918842570&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84918842570&partnerID=8YFLogxK
U2 - 10.1016/j.econmod.2014.11.018
DO - 10.1016/j.econmod.2014.11.018
M3 - Article
AN - SCOPUS:84918842570
SN - 0264-9993
VL - 45
SP - 187
EP - 192
JO - Economic Modelling
JF - Economic Modelling
ER -