Article ID Journal Published Year Pages File Type
5055704 Economic Modelling 2009 4 Pages PDF
Abstract

The paper examines the economic role of modelling information on the decision problem of an exporting firm under exchange rate risk and hedging. Information is described in terms of market transparency, i.e., a publicly observable signal conveys more information about the random foreign exchange rate. We analyze the interaction between market transparency and the ex ante expected utility of the exporting firm. It is shown that more transparency on the foreign exchange market may result in higher or lower export production.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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