Trade and exposure of Eastern European multinationals

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We find that about 19% of our sample of 149 Eastern European multinationals’ stock returns experienced economically significant exposure effects to the U.S. dollar for the period January 2000 to December 2004. The average exposure of the highly net exporting (importing) industry portfolios is positive (negative). Foreign exposure is found to increase with the evolution of net positions in U.S. foreign trade and with the industries’ degree of openness towards U.S. foreign markets. We also find that foreign exposure decreases with firm size.