Abstract
Building upon a data set of publicly traded firms in Thailand, we find that the exposure of firms to exchange rate volatility appears to change during the period of capital account restrictions (in the form of the un-remunerated reserve requirement on capital inflows) between 2006-07. We also find that exchange rate volatility of Thai baht against four major currencies- the US dollar, the British pound, the euro, and the Japanese yen- appears to be greater during the implementation period of capital account restrictions. Our results also show that stock returns for some firms are greater/less sensitive to exchange rate volatility during the capital account restrictions period, suggesting that the restrictions on capital inflows are beneficial to some firms while have a detrimental effect on other firms.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
