Currency Risk Exposure of Chinese Corporations

20 Pages Posted: 19 Feb 2011

See all articles by Raj Aggarwal

Raj Aggarwal

University of Akron; Federal Reserve Banks - Federal Reserve Bank of Cleveland; Kent State University; Kent State University Foundation

Xiaoying Chen

California State University, Long Beach

Jasmine Yur-Austin

California State University, Long Beach

Date Written: February 16, 2011

Abstract

Despite the growing international importance of Chinese economy, the currency risk of Chinese firms has received little attention. This paper documents Chinese exporters are exposed to significant currency risk to ASEAN countries and firms in three industries are adversely affected when Yuan appreciates (as in 2005-06). Yuan appreciation also impacts exporters to India, Australia and Russia in certain industries. Interestingly, Chinese exporters have insignificant currency risk associated with China's top trading partners: EU, US, Japan and Hong Kong. Overall, the magnitudes of the currency risk coefficients for Chinese companies (<10%) are smaller than those previously documented for other countries (20%-40%).

Suggested Citation

Aggarwal, Raj and Chen, Xiaoying and Yur-Austin, Jasmine, Currency Risk Exposure of Chinese Corporations (February 16, 2011). Available at SSRN: https://ssrn.com/abstract=1762818 or http://dx.doi.org/10.2139/ssrn.1762818

Raj Aggarwal (Contact Author)

University of Akron ( email )

Akron, OH 44325-4803
United States

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

Kent State University ( email )

College of Business Administration
Kent, OH 44242-0001
United States

Kent State University Foundation ( email )

Akron, OH 44325-4803
United States

Xiaoying Chen

California State University, Long Beach ( email )

1250 Bellflower Blvd
Long Beach, CA 90064
United States

Jasmine Yur-Austin

California State University, Long Beach ( email )

1250 Bellflower Blvd
Long Beach, CA 90064
United States

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