Foreign currency borrowing, exports and firm performance: evidence from a currency crisis

Bougheas, Spiros; Lim, Hosung; Mateut, Simona; Mizen, Paul; Yalçın, Cihan

doi:10.1080/1351847x.2017.1421246

Cited by 5 publications

(6 citation statements)

References 51 publications

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“…The international finance is not only significant for Asian firms. SMEs in European markets also face a shortage of financial resources and they get benefits of external finance (e.g., finance offered by other developed markets in a host developed country) to expand their operation [72]. We support the argument that external funding is very crucial for SMEs in the emerging market in Pakistan to smooth their operation.…”

Section: Discussionsupporting

confidence: 67%

“…Our findings favor several studies that are conducted in developed and emerging economies in the relevant context. For instance, from the importance of international finance perspective, our findings favor Bougheas et al [72], who pointed out that international finance is essential for a host firm to expand its business in other markets and grow speedily. Our results do not show a significant influence of international technology on SCP.…”

Section: Discussionsupporting

confidence: 58%

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Do International Capabilities and Resources Configure Firm’s Sustainable Competitive Performance? Research within Pakistani SMEs

Ullah

Khattak

et al. 2018

Sustainability

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Market conditions in emerging economies are often reported as less stable and volatile. The business sector, especially Small and Medium Enterprises (SMEs) in emerging economies, face several shortcomings including lack of resources, lack of finance, lack of support and lack of human skills, etc. Hence, they look to international support and resources to survive in a long run in the dynamic markets. This research examines the role of international finance, international technology, international experience and international network in SME firms’ Sustainable Competitive Performance (SCP) in Pakistan. SMEs are a major source of employment and value creation and, therefore, are very relevant to Pakistan economic and social development and improved sustainability. Hypotheses were tested on the data set collected from 304 emerging SMEs. After Structural Equation Modelling (SEM) was applied in Analysis of a Moment Structures (AMOS), the results indicate that international finance, international experience and international network significantly positively contribute to SCP, but international technology is not a significant predictor of SCP. This research recommends top managers and policy makers to give enough attention to the particular international resources and capabilities in order to configure their firm survival in the turbulent market.

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Section: Discussionsupporting

confidence: 67%

Section: Discussionsupporting

confidence: 58%

Do International Capabilities and Resources Configure Firm’s Sustainable Competitive Performance? Research within Pakistani SMEs

Ullah

Khattak

et al. 2018

Sustainability

View full text Add to dashboard Cite

show abstract

“…While this feature is also in place in some developed countries, it is exceptionally prevalent in the emerging economies (see e.g. Galindo and Leiderman (2005) and Hake et al (2014) for evidence from Latin America or Kim et al (2015) and Bougheas et al (2016) for evidence from East Asia), in particular those from the Central and Eastern European (CEE) region.…”

Section: Introductionmentioning

confidence: 99%

Transmission of monetary policy and exchange rate shocks under foreign currency lending

Skibińska

2018

Post-Communist Economies

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This paper analyses the differences in reaction of domestic and foreign currency lending to monetary and exchange rate shocks, using a panel VAR model estimated for three biggest Central and Eastern European countries (Poland, the Czech Republic and Hungary). Our results point toward a drop in domestic currency loans and an increase of foreign currency credit in reaction to monetary policy tightening in Poland and Hungary, suggesting that the presence of foreign currency debt weakens the transmission of monetary policy. A currency depreciation shock leads to an initial decline in foreign currency lending, but also in loans denominated in domestic currency as central banks react to a weaker exchange rate by increasing the interest rates. However, after several quarters, credit in foreign currency accelerates, indicating that borrowers start using it to substitute for depressed domestic currency lending.

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“…1 Bloom et al (2007) and Bloom (2009) have shown that the shocks pertaining to the volatility in the stock market reduce firm-level investment and mitigate its response to demand shocks. In a related context, Bougheas et al (2018), showed that after a sudden currency devaluation, exporters whose foreign sales are more competitively priced under a devalued currency responds by keeping a positive premium over cost at the margin, and improve their foreign market shares. A large body of firm-level trade literature have recognized the importance of investment dynamics as a potential source of improving the firm-level export performance (e.g., Costantini and Melitz, 2007;Atkeson and Burstein, 2010).…”

Section: Introductionmentioning

confidence: 99%

Spot exchange rate volatility, uncertain policies and export investment decision of firms: a mean-variance decision approach

Mukherjee

Mishra

et al. 2020

The European Journal of Finance

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This paper studies characteristics of optimal investment decisions of risk-averse firms who engage in exports under two types of risks: endogenous and background risks. While endogenous risk arises from the fluctuations in spot exchange rate and affects directly the profit of an exporting firm, background risk arises from uncertain changes in firm-and industryspecific domestic and foreign policies. We propose a mean-variance decision-theoretic model to trace out impact of perturbations in the distributions of these uncertainties on the optimal investment strategy. A testable empirical model is derived and applied to a panel of 840 exporting Indian manufacturing firms for the period 1995-2015. Our results suggest that Indian manufacturing exporters depict decreasing absolute risk aversion and that firms' risk preferences are prone to variance vulnerability.

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Foreign currency borrowing, exports and firm performance: evidence from a currency crisis

Cited by 5 publications

References 51 publications

Do International Capabilities and Resources Configure Firm’s Sustainable Competitive Performance? Research within Pakistani SMEs

Do International Capabilities and Resources Configure Firm’s Sustainable Competitive Performance? Research within Pakistani SMEs

Transmission of monetary policy and exchange rate shocks under foreign currency lending

Spot exchange rate volatility, uncertain policies and export investment decision of firms: a mean-variance decision approach

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