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¡ö Literature and Data Survey
TEACHING ELIGIBILITY Certificate of Excellence in Teaching, Language, and Pedagogy for International Teaching Assistants, University of Missouri-Columbia, Spring 1999 INVITED CONFERENCE PRESENTATIONS The 30th Annual Meeting of Eastern Economic Association, Washington D.C., 2004 The 56th Annual Meeting of New York State Economic Association, Federal Reserve Bank of New York, 2003 The 2nd Annual Hawaii International Conference on Social Sciences, Honolulu, 2003 The School of Politics and Economics Graduate Students Conference, Claremont Graduate University, 2002 PROFESSIONAL ACTIVITIES ¡ö Referee Service Hawaii International Conference on Social Sciences, 2004 ¡ö Discussant Service International Industrial Organization Conf., Northwestern University, 2004 Eastern Economic Association Conf., Washington D.C., 2004 N.Y. State Economic Association Conf., Federal Reserve Bank of New York, 2003 ¡ö Affiliation Member American Economic Association, American Finance Association, Eastern Economic Association, New York State Economic Association WORKING PAPERS Foreign Exposure of U.S. Multinational Firms and its Determinants: Evidence from Region-Specific Datasets (with A. Denzau) Industrial Structure and Foreign Exposure of Industry Portfolio AFDC Recipients¡¯ Socioeconomic Characteristics and Post-AFDC Wage WORK IN PROGRESS The Impact of Interest Rate Movements on Firms in the Banking and Financial Industry COMPUTER SKILL SAS, RATS, LIMDEP, GAUSS NON-ACADEMIC ACTIVITIES Treasurer, Korean Students Association, Department of Economics, University of Missouri-Columbia, Fall 1999 ¨C Spring 2000 Composition Award, the 11th Annual Music Festival of Kwangwoon University, 1993 Student Journalist, Official Newspaper of Kyung-Hee University, 1992 ¨C 1993 Artillerist, National Military of Republic of Korea, 1993 ¨C 1994 REFERENCES Arthur T. Denzau Paul J. Zak Professor Dept. Chair and Associate Professor Department of Economics Department of Economics Claremont Graduate University Claremont Graduate University 160 E. Tenth Street 160 E. Tenth Street Claremont, CA 91711 Claremont, CA 91711 (909) 621-8692 (909) 621-8788 arthur.denzau@cgu.edu paul.zak@cgu.edu
Darren Filson Jennifer L. Ward-Batts Associate Professor Assistant Professor Department of Economics Department of Economics Claremont Graduate University Claremont McKenna College 160 E. Tenth Street Bauer Center, 500 E. Ninth Street Claremont, CA 91711 Claremont, CA 91711 (909) 621-88782 (909) 607-2800 darren.filson@cgu.edu jennifer.ward-batts@claremontmckenna.edu
Peter R. Mueser Associate Professor Department of Economics University of Missouri 331 Professional Building Columbia, MO 65211 (573) 882-6427 Doctoral Thesis Abstract Foreign Risk Exposure of U.S. Multinational Firms: Firm- and Industry-Level Analysis with Region-Specific Datasets
Abstract
This dissertation examines the impact of foreign exchange rate movements on the value of multinational firms. First, in order to provide a theoretical framework on the foreign exposure mechanism and determinants, I employ a standard profit-maximizing model for two types of firms: ones with domestic operations only and the others with both domestic and foreign operations. This theoretical analysis results that (1) exchange rate movements affect the value of both firms and (2) the determinants of foreign risk exposure are firm-specific factors, such as sales and assets, and the industry-specific factor, such as the price elasticity of market demand. As the next step, this dissertation empirically evaluates the theory. Considering the problems causing most previous studies fail to find a significant exposure, I examine U.S. multinational firms that had Asian and Mexican operations during the ¡°fast and furious¡± [1] Asian and Mexican crisis. Based on the hypothesis that the unexpectedly greater fluctuations in the foreign currencies during the crises would mitigate effectiveness of the firms¡¯ risk management for the currencies, I find that the sample firms are more likely to be exposed during the crises. Also, by decomposing exposures into firm-specific factors, I find that the sample firms are more exposed as they have more sales and assets in the areas and when they have smaller number of employees or are affiliated with one or two industries. These results are consistent with the optimal hedging theory in terms of economies of scale in hedging activities. Finally, in addition to the firm-level analysis, I analyze industry-level foreign exposure, which sheds light on the importance of industry-specific effects for exposure. By segregating the firms into industrial groups, I find that foreign exposures of the two-digit SICs differ from each other, and the manufacturing industry is more exposed than any other due to their greater foreign trade. Also, for industries within manufacturing, I find that durable goods, non-intermediate goods, and competitive-structure industry are more exposed than non-durable, intermediate goods, and non-competitive industry, respectively. [1] This term is originally from the article, Kamisky et al, ¡°The Unholy Trinity of Financial Contagion,¡± Journal of Economic Perspectives, Fall 2003 |
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