Firm-Level Competition and Exchange Rate Exposure: Evidence from a Global Survey of Firms


  • Mikael C. Bergbrant,

  • Kaysia Campbell,

  • Delroy M. Hunter

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    • Mikael C. Bergbrant is an Assistant Professor of Finance in the Department of Economics and Finance, Tobin College of Business at St. John's University in Queens, NY. Kaysia Campbell is an Assistant Professor in the Department of Finance, College of Business at East Carolina University in Greenville, NC. Delroy M. Hunter is the Bonanni and Associate Professor of Finance in the College of Business at the University of South Florida in Tampa, FL.

  • This paper, under a different title, has benefitted from the comments of Rohan Williamson, seminar participants at the Financial Management Association meetings and East Carolina University, and members of the Research and Scholarship Committee at the College of Business, University of South Florida. We thank an anonymous referee and Marc Lipson (Editor), for their helpful comments which greatly improved the exposition of the paper. This work was supported, in part, by a Summer Research Grant from the College of Business, USF.


We examine the effect of competition on exchange rate exposure using survey data from 55 countries. We find that exposure increases with the intensity of competition. Exposure is higher when firms face price competition in international and domestic product markets and when rivals compete using an unfair financial advantage. Furthermore, competition is a leading determinant of exposure, dominating the usual determinants. Exposure also increases with several determinants not previously empirically examined, such as firm-level financial constraints. These results hold for small, large, foreign-involved, and purely domestic firms. Finally, import-only firms have higher exposure than export-only firms. Our survey results are likely to capture exposure before firms’ hedging actions.