Export production, hedging exchange rate risk: the duopoly case

Arbeitspapier

This paper studies a Cournot duopoly in international trade so that the firms are exposed to exchange rate risk. A hedging opportunity is introduced by a forward market where the foreign currency can be traded on. We investigate two settings: First we assume that hedging and output decisions are taken simultaneously. We show that hedging is just done for risk managing reasons as it is not possible to use hedging strategically. In this setting the well-known separation result of the competitive firm holds if both firms have the hedging opportunity. In the second setting the hedging decisions are made before the output decisions. We show that hedging is used not only to manage the risk exposure but also as a strategic device. Furthermore we find that no separation result can be stated.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Dresden Discussion Paper Series in Economics ; No. 06/08

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Trade: General ; Neoclassical Models of Trade ; International Finance: General ; Foreign Exchange
• Thema: Exchange Rate risk ; hedging ; exports ; duopoly ; Wechselkursrisiko ; Export ; Hedging ; Duopol ; Außenwirtschaftstheorie ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Broll, Udo ; Wahl, Jack E. ; Wessel, Christoph
• Ereignis: Veröffentlichung
• (wer): Technische Universität Dresden, Fakultät Wirtschaftswissenschaften
• (wo): Dresden
• (wann): 2008

Weitere Informationen

• Handle: http://hdl.handle.net/10419/36492
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ