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Navigating Global Finances: An In-depth Analysis of Foreign Exchange Exposure in Multinational Companies - Insights from Industry Practitioners

Author

Listed:
  • Augustine C. Arize
  • Giuliana Campanelli Andreopoulos
  • John Malindretos
  • Alex Panayides
  • Demetri Tsanacas

Abstract

Purpose: The primary objective of this study is to investigate the behavior of practitioners in the face of global finance challenges, with a specific focus on operating foreign exchange exposure. Design/Methodology/Approach: The study relies on a survey conducted among 200 leading multinational companies listed in the Forbes 500. Findings: The results obtained from the specialized questionnaire indicate that hedging is pursued, albeit not fully but partially. Practical Implications: In conclusion, the study supports the perspective that hedging Operating Foreign Exchange Exposure is not simple; rather, it is a complex undertaking. Originality/Value: The research method is unique as it is based on a specific sample of top managers from 200 multinational companies.

Suggested Citation

  • Augustine C. Arize & Giuliana Campanelli Andreopoulos & John Malindretos & Alex Panayides & Demetri Tsanacas, 2023. "Navigating Global Finances: An In-depth Analysis of Foreign Exchange Exposure in Multinational Companies - Insights from Industry Practitioners," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 641-648.
    • Handle: RePEc:ers:journl:v:xxvi:y:2023:i:2:p:641-648
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    References listed on IDEAS

    as
    1. Philip R. Lane & Jay C. Shambaugh, 2010. "Financial Exchange Rates and International Currency Exposures," American Economic Review, American Economic Association, vol. 100(1), pages 518-540, March.
    2. Bartram, Söhnke M., 2008. "What lies beneath: Foreign exchange rate exposure, hedging and cash flows," Journal of Banking & Finance, Elsevier, vol. 32(8), pages 1508-1521, August.
    3. R. Rupeika-Apoga & S.H. Zaidi & Y.E. Thalassinos & E.I. Thalassinos, 2018. "Bank Stability: The Case of Nordic and Non-Nordic Banks in Latvia," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 39-55.
    4. Chaieb, Ines & Mazzotta, Stefano, 2013. "Unconditional and conditional exchange rate exposure," Journal of International Money and Finance, Elsevier, vol. 32(C), pages 781-808.
    5. Augustine C. Arize & John Malindretos & Ikechukwu Ndu & Demetri Tsanacas & Neirouz Watad, 2022. "A Survey of Multinational Company Accounting Foreign Exchange Exposure," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 12(2), pages 142-149.
    6. repec:ers:journl:v:vi:y:2018:i:2:p:39-55 is not listed on IDEAS
    7. Bartram, Söhnke M. & Brown, Gregory W. & Minton, Bernadette A., 2010. "Resolving the exposure puzzle: The many facets of exchange rate exposure," Journal of Financial Economics, Elsevier, vol. 95(2), pages 148-173, February.
    8. Augustine C. Arize & John Malindretos & Ikechukwu Ndu & Demetri Tsanacas & Neirouz Watad, 2022. "A Survey of Multinational Company Accounting Foreign Exchange Exposure," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 12(2), pages 128-135.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Global finance; foreign exchange exposure; MNC.;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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