ŠIMÁKOVÁ, Jana. The Impact of Exchange Rate Movements on Firm Value in Visegrad Countries. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis. 2017, vol. 65, No 6, p. 2105-2111. ISSN 1211-8516.
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Basic information
Original name The Impact of Exchange Rate Movements on Firm Value in Visegrad Countries
Authors ŠIMÁKOVÁ, Jana (703 Slovakia, guarantor, belonging to the institution).
Edition Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2017, 1211-8516.
Other information
Original language English
Type of outcome Article in a journal
Field of Study 50202 Applied Economics, Econometrics
Country of publisher Czech Republic
Confidentiality degree is not subject to a state or trade secret
WWW URL
RIV identification code RIV/47813059:19520/17:00010986
Organization unit School of Business Administration in Karvina
Keywords in English Currency exposure; Exchange rate; Firm value; Jorion's model
Changed by Changed by: RNDr. Daniel Jakubík, učo 139797. Changed: 7/2/2020 10:58.
Abstract
Company's involvement in global activities through international trade is the primary source of their foreign exchange exposure. Many empirical studies suggest the negative impact of uncertainty about the development of the exchange rate on cash flow and profitability of companies, and thus their market values. Some economic studies show that foreign revenues are positively correlated with the exchange rate exposure and in a short period, currency depreciation negatively affects the market value of listed companies. On the other hand, there are studies that show no statistically significant links between the value of the companies and exchange rates. The aim of this paper is to evaluate the effect of exchange rates on the value of companies listed on stock exchanges in the Visegrad countries. Paper applies Jorion's model and panel data regression for the sample period 2002 - 2016. Estimations for the whole period revealed negative relationship between exchange rate and value of stock companies. The highest exposure is observed in case of Hungary and Czechia. Positive tendency can be seen in comparison of pre-crisis and post-crisis period. Except the case of Hungary, all markets showed decreased exchange rate exposure in time.
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