publication . Article . Other literature type . 1985

Political Risk and Foreign Exchange Rates: An Efficient-Market Approach

Jean-Claude Cosset; Bruno Doutriaux De La Rianderie;
Open Access
  • Published: 01 Sep 1985 Journal: Journal of International Business Studies, volume 16, issue 3 September, pages 21-55
Abstract
This paper examines the reaction of the foreign exchange market to the announcement of changes in the business environment of a country. Our results suggest that sampled political risk news conveys important information about a country's investment climate and causes its currency's exchange rate to vary. It appears, however, that the reaction of the foreign exchange market is more dramatic for unfavorable events than for favorable events. The evidence presented is also consisted with the hypothesis that the foreign exchange market is efficient in interpreting the type of event considered in this study.© 1985 JIBS. Journal of International Business Studies (1985)...
Subjects
free text keywords: Management of Technology and Innovation, Strategy and Management, Economics and Econometrics, General Business, Management and Accounting, Business and International Management, Finance, business.industry, business, International financial management, Foreign exchange risk, Foreign direct investment, Sterilization (economics), Exchange rate, International trade, International finance, Foreign exchange market, Foreign policy analysis
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publication . Article . Other literature type . 1985

Political Risk and Foreign Exchange Rates: An Efficient-Market Approach

Jean-Claude Cosset; Bruno Doutriaux De La Rianderie;