Firm-level exchange rate exposure in the Eurozone

Elaine Hutson, Anthony O'Driscoll

Research output: Contribution to journalArticleResearchpeer-review

30 Citations (Scopus)


Using a sample of 1154 European firms from 11 countries, we show that firm-level exchange exposure for Eurozone and non-Eurozone European firms has increased since the introduction of the euro, but this rise was smaller for Eurozone than non-Eurozone firms. The increase in firm-specific exposure was offset by a substantial reduction in market-level exchange exposure in most Eurozone countries, so the advent of the euro appears to have been associated with a shift in exchange risk from systematic to firm-specific. We also find that post-euro, Eurozone firms - exchange exposure is significantly greater than that of non-Eurozone European firms. This difference, however, disappears after controlling for several country-specific and firm-specific characteristics that potentially influence firms exchange exposure.
Original languageEnglish
Pages (from-to)468 - 478
Number of pages11
JournalInternational Business Review
Issue number5
Publication statusPublished - 2010
Externally publishedYes

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