留學生作業;關于外匯風險與公司價值的關系研究
B3. Identify key factors and discuss how they are related to each other in a theoretical framework.
As to the studies on thttp://www.ttc-switch.comhe foreign exchange risk exposure of the firms, there are two main aspects. One is about whether the foreign exchange risk exposure of the firms is significant and analyzes the relationship of between the foreign exchange risk exposure and the value of the firms. The other one refers to the influencing factors of the foreign exchange risk exposure. This is an important area in foreign exchange risk management. The impact of the foreign exchange risk exposure on the firm value is mainly due to the changes of the foreign exchange rate. And the correlation degree between the firm value and the changes of the foreign exchange rate could be use to represent the foreign exchange risk exposure of the firms. If the correlation degree is high, the firms might have significant foreign exchange risk exposure and they should take some measure to control it. If the test is not significant, the change of the foreign exchange rate might have little effect on the firms. In order to know the situation of the foreign exchange risk exposure better, I plan to study the influencing factors of the foreign exchange risk exposure. And in this paper, I consider the firm size is a main factor, based on the thought of Solakoglu (2005). With this, the foreign exchange risk could be managed better.
B4.
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Based on the analysis on the relative literatures and the actual situation in China, I would take the cash flow method and use the operating income to represent the firm’s value. According to the choice of exchange rate, Bodnar and Gentry, as well as Jorion consider that nominal exchange rate has significant correlation. Moreover, the nominal exchange rate in China couldn’t reflect well the actual level of RMB exchange rate. And the peg policy makes the RMB/USD exchange rate reposeful for many years. So the study should use real exchange rate. I would choose 10 countries according to the export-import trade quantity and competition degree with Chinese textile firms, such as the U.S., Japan, France, India, Maxico, Korea, Pakistan and so on, to calculate the real exchange rate weighted by the trade quantity. In addition, I will choose the total asset as the variable to represent the size of the firms.#p#分頁標題#e#
B5. Propose relevant hypotheses for empirical testing.
Shapiro (1999) considers that the foreign exchange could affect the future cash flow through the import and export. Then a more flexible exchange rate mechanism will directly increase the foreign exchange risk of import and export enterprises in the textile industry. Besides, due to the raw material and technology in China, the import and export quantities of production in this industry are different so that foreign exchange risk would have different impact on them.
I primarily study about the exchange rate risk exposure of Chinese textile companies and test the factors that may affect it, such as, the size of the companies and so on. Before the research, I would set some hypotheses as following:
H1: There is significant exchange rate risk effect among textile firms in China.
H2: There is a difference in the exchange rate risk for firms’ different production, such as wool textile, cotton textile and textile clothing.
H3: There is difference in the exchange rate risk effect before and after the reform of the RMB exchange rate system.
H4: There is a negative relationship between firm size and the exchange rate risk.
I will use some empirical method to test these hypotheses so as to find out the situation of foreign exchange risk exposure in Chinese textile firms. These would provide some information for the foreign exchange risk http://www.ttc-switch.commanagement, and enhance the company's competitive advantage.
B6. If there are data sources available for you to test your hypotheses answer part (i) below; but if data sources are not available, answer part (ii) instead:
The data sources decide the effectiveness of the study, so I choose the data in a suitable and reasonable way. The data of the exchange rates come from the State Administration of Foreign Exchange, which ensure the authenticity of the data. Since Foreign Trade Law of the People's Republic of China was issued in 1994, the export –import trade has increase largely. So I mainly study the foreign exchange risk of the firms during the period of 1994-2007. And the data of operating income and total assets are from the annual report of the listed companies. And the samples are the listed textile firms in China except some ST companies.
In the empirical study, I will use regression method to study the impact of exchange rate changes on the operating income of the firm:
Operating income = a1 + b1 exchange rate + b2 exchange rate changes + c1
And the b2 would represent the foreign exchange risk exposure of the firms. And the significance of this analysis will test the H1. Then, I will analyze whether there is difference in the exchange rate risk effect between the periods of 1994-2005 and 2005- 2007, which will examine the third hypothesis. After this, I will study the foreign exchange risk exposure of three kinds of firms, such as wool textile, cotton textile and textile clothing. And this will examine the second hypothesis. In the last part of the study, I will choose the total asset as the variable to represent the size of the firms by regress the total asset to the exchange risk exposure coefficient.#p#分頁標題#e#
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And the last hypothesis will be tested. After the tests, the foreign exchange risk exposure of the firms could be well known and the managers should take some effective measure to deal with it.