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FRI 4-2: Networks
Time:
Friday, 05/Dec/2025:
3:10pm - 4:05pm
Presentations
Rethinking Exchange Rate Exposure in Equity Markets Through International Trade Networks
Seo Ha Kim2 , Sungjune Pyun 1
1 Yonsei University, Korea, Republic of (South Korea); 2 Stanford University, Stanford, CA
This paper examines the relationship between currency fluctuations and firm values,
focusing on the role of international trade networks. We argue that the relative currency
value of export destinations to import origins currencies is important. A local currency
appreciation relative to exporting destination countries reduces stock prices, while an
appreciation relative to import origin countries increases stock prices. These effects are
amplified by greater trade intensity and are observed at both the country-industry and
aggregate country levels. Moreover, we demonstrate that the differences in corporate
profit margins and net export volume of corporations explain a substantial fraction of
the cross-country variation in country-level currency betas measured against the USD.
