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Article: Export flexibility and currency hedging

TitleExport flexibility and currency hedging
Authors
Issue Date2003
PublisherWiley-Blackwell Publishing, Inc.. The Journal's web site is located at http://www.wiley.com/bw/journal.asp?ref=0020-6598
Citation
International Economic Review, 2003, v. 44 n. 4, p. 1295-1312 How to Cite?
AbstractThis article studies the behavior of an export-flexible firm under exchange rate uncertainty. We show that the separation theorem holds if selling exclusively in the domestic market is suboptimal even under the most unfavorable spot exchange rate. Otherwise, the firm's optimal output depends on its preferences and on the underlying uncertainty. We further show that the full-hedging theorem holds only when the firm always finds it optimal to sell its entire output in the foreign market. Otherwise, export flexibility introduces a convexity into the firm's foreign exchange risk exposure, which calls for the use of currency options for hedging purposes.
Persistent Identifierhttp://hdl.handle.net/10722/85687
ISSN
2015 Impact Factor: 1.29
2015 SCImago Journal Rankings: 2.153
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorWong, KPen_HK
dc.date.accessioned2010-09-06T09:08:02Z-
dc.date.available2010-09-06T09:08:02Z-
dc.date.issued2003en_HK
dc.identifier.citationInternational Economic Review, 2003, v. 44 n. 4, p. 1295-1312en_HK
dc.identifier.issn0020-6598en_HK
dc.identifier.urihttp://hdl.handle.net/10722/85687-
dc.description.abstractThis article studies the behavior of an export-flexible firm under exchange rate uncertainty. We show that the separation theorem holds if selling exclusively in the domestic market is suboptimal even under the most unfavorable spot exchange rate. Otherwise, the firm's optimal output depends on its preferences and on the underlying uncertainty. We further show that the full-hedging theorem holds only when the firm always finds it optimal to sell its entire output in the foreign market. Otherwise, export flexibility introduces a convexity into the firm's foreign exchange risk exposure, which calls for the use of currency options for hedging purposes.en_HK
dc.languageengen_HK
dc.publisherWiley-Blackwell Publishing, Inc.. The Journal's web site is located at http://www.wiley.com/bw/journal.asp?ref=0020-6598en_HK
dc.relation.ispartofInternational Economic Reviewen_HK
dc.titleExport flexibility and currency hedgingen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0020-6598&volume=44&spage=1295&epage=1312&date=2004&atitle=Export+Flexibility+and+Currency+Hedgingen_HK
dc.identifier.emailWong, KP: kpwongc@hkucc.hku.hken_HK
dc.identifier.authorityWong, KP=rp01112en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1111/1468-2354.t01-1-00110en_HK
dc.identifier.scopuseid_2-s2.0-0344980742en_HK
dc.identifier.hkuros92181en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0344980742&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume44en_HK
dc.identifier.issue4en_HK
dc.identifier.spage1295en_HK
dc.identifier.epage1312en_HK
dc.identifier.isiWOS:000186023100005-
dc.publisher.placeUnited Statesen_HK
dc.identifier.scopusauthoridWong, KP=7404759417en_HK

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