This paper measures asymmetric exchange rate exposure of Korean manufacturing firms and analyzes its determinants. The test result confirms significant relation between asymmetric exchange rate exposure and foreign currency denominated debt. Foreign c...
This paper measures asymmetric exchange rate exposure of Korean manufacturing firms and analyzes its determinants. The test result confirms significant relation between asymmetric exchange rate exposure and foreign currency denominated debt. Foreign currency denominated debt is related with the increase of asymmetric foreign currency exchange rate exposure. In summary, my test result supports the ``foreign currency denominated debt effect hypothesis``. Export ratio also is significantly related with asymmetric exchange rate exposure, while the direction of relation is opposite to that of foreign currency denominated debt. This study suggests that we could manage asymmetric exchange rate exposure caused by foreign currency denominated debt with foreign currency denominated sales.