Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
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Session Overview |
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FRI 4-2: Networks
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Rethinking Exchange Rate Exposure in Equity Markets Through International Trade Networks 1Yonsei University, Korea, Republic of (South Korea); 2Stanford 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.
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