Artikel Wall Street
Eun−Resnick: International
Financial Management,
Fourth Edition
III. Foreign Exchange
Exposure and Management
9. Management of
Economic Exposure
© The McGraw−Hill
Companies, 2007
CHAPTER
CHAPTER OUTLINE
9
Management of
Economic Exposure
How to Measure Economic Exposure
Operating Exposure: Definition
Illustration of Operating Exposure
Determinants of Operating Exposure
Managing Operating Exposure
Selecting Low-Cost Production Sites
Flexible Sourcing Policy
Diversification of the Market
R&D Efforts and Product Differentiation
Financial Hedging
CASE APPLICATION: Exchange Risk Management at Merck
Summary
Key Words
Questions
Problems
Internet Exercises
MINI CASE: Economic Exposure of Albion
Computers PLC
References and Suggested Readings
AS BUSINESS BECOMES increasingly global, more and more firms find it necessary to pay careful attention to foreign exchange exposure and to design and implement appropriate hedging strategies. Suppose, for example, that the U.S. dollar substantially depreciates against the Japanese yen, as it often has since the mideighties. This change in the exchange rate can have significant economic consequences for both U.S. and Japanese firms. For example, it can adversely affect the competitive position of Japanese car makers in the highly competitive U.S. market by forcing them to raise dollar prices of their cars by more than their U.S. competitors do. The same change in exchange rate, however, will tend to strengthen the competitive position of import-competing U.S. car makers. On the other hand, should the dollar appreciate against the yen, it would bolster the competitive position of Japanese car makers at the expense of U.S. makers. A real-world example of the effect of exchange rate changes is provided in the International Finance in
Practice box on page 224, “U.S. Firms Feel the Pain of Peso’s Plunge.” The box explains how U.S. companies were adversely affected by the collapse of the
Mexican peso during the period 1994–95.
Financial Management,
Fourth Edition
III. Foreign Exchange
Exposure and Management
9. Management of
Economic Exposure
© The McGraw−Hill
Companies, 2007
CHAPTER
CHAPTER OUTLINE
9
Management of
Economic Exposure
How to Measure Economic Exposure
Operating Exposure: Definition
Illustration of Operating Exposure
Determinants of Operating Exposure
Managing Operating Exposure
Selecting Low-Cost Production Sites
Flexible Sourcing Policy
Diversification of the Market
R&D Efforts and Product Differentiation
Financial Hedging
CASE APPLICATION: Exchange Risk Management at Merck
Summary
Key Words
Questions
Problems
Internet Exercises
MINI CASE: Economic Exposure of Albion
Computers PLC
References and Suggested Readings
AS BUSINESS BECOMES increasingly global, more and more firms find it necessary to pay careful attention to foreign exchange exposure and to design and implement appropriate hedging strategies. Suppose, for example, that the U.S. dollar substantially depreciates against the Japanese yen, as it often has since the mideighties. This change in the exchange rate can have significant economic consequences for both U.S. and Japanese firms. For example, it can adversely affect the competitive position of Japanese car makers in the highly competitive U.S. market by forcing them to raise dollar prices of their cars by more than their U.S. competitors do. The same change in exchange rate, however, will tend to strengthen the competitive position of import-competing U.S. car makers. On the other hand, should the dollar appreciate against the yen, it would bolster the competitive position of Japanese car makers at the expense of U.S. makers. A real-world example of the effect of exchange rate changes is provided in the International Finance in
Practice box on page 224, “U.S. Firms Feel the Pain of Peso’s Plunge.” The box explains how U.S. companies were adversely affected by the collapse of the
Mexican peso during the period 1994–95.
References: Companies, 2007 223 exists between stock returns and the dollar’s value. Recent studies, such as Choi and Prasad (1995), Simkins and Laux (1996), and Allayannis and Ofek (2001), also document that U.S