The Effects of Exchange Rate Movements on Publicly Traded US Corporations

49 Pages Posted: 10 May 2024

See all articles by Ivo Welch

Ivo Welch

University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)

Yuqing Zhou

The Chinese University of Hong Kong (CUHK) - CUHK Business School

Date Written: April 30, 2024

Abstract

Previous literature struggled to find strong effects of exchange-rate exposure on US stock returns. Our paper brings firm-specific export data to reinvestigate this exchange-rate puzzle and finds surprisingly large exchange-rate effects on exports, sales, profits, and stock returns. These were not offset by (financial or operational) hedging, and they seem to have not only been due to export changes but also due to changes in the domestic competitive environment. The effects increased over time and were stronger for larger and more export-oriented firms.

Keywords: Exchange Rates, Exports, and Financial Market Reactions

JEL Classification: F14, F23, F36

Suggested Citation

Welch, Ivo and Zhou, Yuqing, The Effects of Exchange Rate Movements on Publicly Traded US Corporations (April 30, 2024). Available at SSRN: https://ssrn.com/abstract=4811782 or http://dx.doi.org/10.2139/ssrn.4811782

Ivo Welch

University of California, Los Angeles (UCLA) ( email )

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HOME PAGE: http://www.ivo-welch.info

National Bureau of Economic Research (NBER)

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Yuqing Zhou (Contact Author)

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

HOME PAGE: http://www.yuqingzhou.com/

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