Foreign Exposure Research Articles

Foreign business exposure, policy uncertainty, and investment allocation decisions of Chinese multinational corporations

Using unique subsidiary-level data of 3863 Chinese non-financial firms from 2000 to 2019, we document that the multinational firms have 5.3 % higher capital expenditures than domestic firms, relative to the average. After decomposing firms' investment into domestic and offshore investment, we find that the increased capital expenditure of multinational firms results from their offshore investment allocation in response to policy uncertainty in the domestic market. Our analysis suggests that, in the face of domestic uncertainty, multinational firms switch to their offshore markets as a means to reallocate investment, rather than in response to offshore investment opportunities, access to foreign capital, or domestic competition. Overall, this paper helps us better understand the real options theory in the context of international business.

Enhancing energy security and efficiency through a regional integration policy: The case of the Southern Cone

This paper addresses the knowledge gap concerning foreign exchange risk in energy transactions within the Regional Initiative Energy Integration System of the Southern Cone Countries (SIESUR) of the Latin American region. Focusing on the cross-border electricity, it investigates the impact of exchange rate fluctuations on the transaction model in SIESUR: US dollar-denominated cross-border energy contracts with a time lag between invoicing and payment. The objective of this paper is to estimate foreign exchange risk exposure and propose mitigation solutions. Analyzing foreign exchange risk of energy trading among SIESUR member countries reveals substantial financial costs hindering electricity integration. Energy importing countries, facing greater exposure of their local currencies and weakened bargaining power, are particularly vulnerable. A Monte Carlo simulation model, using historical exchange rate data, highlights significant currency volatility, emphasizing the substantial foreign exchange risk exposure within SIESUR. Notably, cost overruns of energy imports due to foreign exchange risk exposure can reach 12.6% of transaction value. Through a global analysis, potential strategies for risk management are explored to foster electricity exchange expansion. Efforts to mitigate foreign exchange risk are crucial for advancing electricity integration within the SIESUR region. This study underscores policy implications for enhancing regional energy security and promoting sustainable development.

Hedge Accounting Disclosures and Sustainable Growth of Listed Deposit Money Banks in Nigeria

The primary problem facing listed deposit money banks in Nigeria is their struggle to achieve sustainable growth in a volatile economic environment. This study investigated the impact of hedge accounting disclosures on the sustainable growth of these banks, focusing on commodity hedge disclosure, interest rate hedge disclosure, and foreign exchange rate disclosure, while controlling for market capitalization. Using an ex post facto research design, the study analyzed secondary data from 11 selected banks over a period of 10 years from 2014 to 2023. The method of data analysis was random effect regression technique. The findings revealed that commodity hedge disclosure (COMD) and interest rate hedge disclosure (INTD) have significant positive effects on the sustainable growth rates of listed deposit money banks in Nigeria. Conversely, foreign exchange rate disclosure (FEXD) has a significant negative effect on sustainable growth, indicating that high levels of foreign exchange risk exposure, when disclosed, may reduce investor confidence and perceived stability. The study concluded that hedge accounting disclosures significantly impact sustainable growth of listed deposit money banks in Nigeria. It recommended the management of listed deposit money banks in Nigeria should enhance commodity and interest rate hedge disclosures to improve the quality of foreign exchange risk communication.

The Hedging Channel of Exchange Rate Determination

Abstract We propose the currency hedging channel that connects countries’ external imbalances to their exchange rate behavior. We present a model in which investors increase their currency hedging during periods of financial distress in proportion to their net foreign asset exposure. This behavior coupled with constrained financial intermediation explains observed relationships between gradually adjusting external imbalances and volatile spot and forward exchange rates. We find empirical support for the hedging channel in both the conditional and unconditional moments of exchange rates, option prices, and countries’ uses of Federal Reserve swap lines. (JEL E44, F31, F32, F41, G11, G15)

Foreign capital exposure and firms’ financial reporting behavior: international evidence from equity market openings

Foreign capital exposure and firms’ financial reporting behavior: international evidence from equity market openings

Climate change in Europe and international portfolio allocation: Micro‐level evidence from global funds

AbstractThis paper investigates the impact of climate change on international portfolio allocations of global funds. We select the heat wave disasters in Europe in 2018 as a quasi‐natural experiment and employ the DID framework. Our findings indicate that global funds would reduce their holdings in the affected country after heat wave disasters. The congestion of inland waterways and electricity shortages during the heatwave have resulted in production delays, thereby transmit risks to the financial sector. Countries with higher foreign exposure experience a larger scale of capital outflow after heat waves; while countries with great institutional quality and resilience demonstrate greater capacity to withstand heat wave disasters. The funds with lower risk tolerance are more sensitive to climate change. Additionally, domestic funds will remain in their home countries post‐heatwave when foreign capitals flow away. These findings have important policy implications, and countries with high climate risks should carefully monitor the capital flows. In order to reduce the impact of climate risks, it is crucial to improve the quality of institution and efficiency of government as well as to implement effective disaster prevention and mitigation measures.

RMB internationalization and exchange rate exposure of Chinese listed firms

This paper investigates the impact of Renminbi (RMB) internationalization on the foreign exchange rate risk exposure of Chinese listed firms. We find that RMB internationalization significantly reduces firms’ exposure to exchange rate fluctuations, particularly for non-US dollar currencies. However, it also increases exchange rate exposure to the US dollar. The findings remain robust even when controlling for other macroeconomic factors, utilizing an instrumental variable approach based on government reports and US dollar performance, and conducting multiple robustness tests. We also find that companies with heterogeneous products, low market power, and high levels of international competition benefit the most from RMB internationalization. Despite the US dollar’s continued centrality in the global monetary system, RMB internationalization offers a relief measure to Chinese firms in terms of exchange rate exposure.

A virtual memory T cell–originated CD44s-hiCD49dlo CD8+ T cell subset confers immune protection against respiratory viral infections

Abstract Virtual memory CD8+ T (TVM) cells, exhibiting a memory phenotype without foreign antigen exposure, exert protective immunity against viral and bacterial infections. However, a TVM-originated distinct CD8+ T cell subset (CD44super-hi (s-hi)CD49dlo CD8+ T cells) induces pathogenesis of a chronic inflammatory disease (alopecia areata (AA)) by NKG2D-mediated innate-like cytotoxicity (Nat. Immunol. 24(8):1308-17 (2023)). Notably, these pathogenic cells were also residing in the lungs. Therefore, in this study, we aimed to investigate the distinct immune characteristics of lung-infiltrated CD44s-hiCD49dlo CD8+ T cells in AA mice and their protective roles against respiratory viral infections. In AA mice, the lung-infiltrated CD44s-hiCD49dlo CD8+ T cells exhibited tissue-resident features, lower NKG2D expression, and less cytotoxicity than those in the skin. In AA mice with influenza A virus infection, the lung CD44s-hiCD49dlo CD8+ T cells showed increased NKG2D expression and cytotoxicity. Finally, CD44s-hiCD49dlo CD8+ T cells in the lungs of AA mice conferred immune protection against influenza virus infection, evidenced by a significantly improved survival rate and less body-weight loss. Collectively, our results elucidate the two-sided roles of TVM cells. The ambivalent aspects of CD44s-hiCD49dlo CD8+ T cells originated from TVM cells provide a solid rationale for the continuing investigation of TVM cells in immune protection and disease.

Modern banking development during natural disasters: Evidence from the early 20th century China

How do commercial banks react to natural disasters? Using data for 375 droughts in 262 prefectures in China during 1906–1927, we find that drought-affected prefectures have more private bank inceptions than unaffected ones. The results remain robust to socioeconomic characteristics, foreign market exposure, and conditions of neighboring prefectures. This effect is driven by the prefectures with more agriculture-dependent enterprises, suggesting that banks meet local financial demand. On the other hand, new banks would enter less when the prefecture has more incumbent banks connected to drought-free areas. We argue that capital size and the network of capital reallocation are two advantages of banks coping with natural disasters over alternative financing vehicles such as pawn shops and foreign banks. In addition, the effect is greater among the prefectures practicing common law and with greater social capital, consistent with existing studies that bank credit supply depends on creditor rights protection. Finally, we show that drought-affected regions with more private bank inceptions have better development in agricultural businesses and social stability.

Domestic lending and the pandemic: How does banks’ exposure to COVID-19 abroad affect their lending in the United States?

Shortly after the pandemic began, globally active U.S. banks cut their term lending to U.S. businesses. Combining three granular bank regulatory datasets, we examine how U.S. banks’ exposure to COVID-related restrictions abroad contributed to these lending cuts. Even after controlling for changes in firms’ credit demand through extensive industry*state*quarter fixed effects, we find strong evidence that U.S. banks with higher foreign COVID exposures reduced their corporate lending, and tightened terms on such loans, significantly more. Banks’ increased risk perception, balance sheet liquidity effects due to higher foreign credit line drawdowns, and higher losses on corporate loans abroad served as mechanisms.

Media Exposure, Political Predispositions, and Conspiracy Theories: Explaining Chinese Beliefs in COVID Origins

Abstract This article examines the underpinning mechanisms of the Chinese public’s belief in two opposing conspiracy theories on the origins of coronavirus disease 2019. Utilizing survey data from 4,251 Chinese internet users, our study reveals both the universality and distinctiveness of mechanisms involved in conspiracy theory beliefs. The distinctiveness primarily emanates from the political system and its media environment, while universality is mainly attributed to the cognitive style of intuitive thinking. In China’s political system, exposure to either domestic or foreign media sources exerts substantial influence on public conspiracy beliefs. Notably, we emphasize the mediating role of political ideologies in domestic media exposure. Exposure to domestic media is more likely to lead conservative individuals to reject the conspiracy asserting COVID-19 originated in a lab in China. Concurrently, nationalism mediates foreign media exposure, reinforcing convictions of U.S.-centered conspiracies. This research shows how media narratives, molded by the political context, generate divergent perspectives on conspiracy theories in China. Furthermore, given the role of intuitive thinking in conspiracy beliefs, our findings highlight the potential for cultivating a more rational society through the promotion of analytical thinking, which requires the public to employ a deliberative and conscious cognitive process when exposed to highly politicized media content.

Involutional Entropion of The Upper Eyelid: A Rare Case Report

Introduction : Entropion is a condition in which the eyelid folds inward or the edge of the eyelid folds inward, causing the eyelashes, eyelid margin, and skin to touch the eyeball. The most common entropion is involutional which caused by the aging process, but reports of cases of involutional entropion in the upper eyelid are rare.
 Case Illustration : A 66-years-old woman presented with redness, foreign body sensation and teary on both eyes. No history of trauma or foreign body exposure. She had a history with similar complaint 2 years ago. Upper eyelid turn inward, dermatochalasis, and corneal abrasion of both eyes were found in ophtalmic examination. Patient was diagnosed with involutional entropion of the left upper eyelid and treated with anterior lamellar repositioning (ALR). A week after the ALR procedure, on examination it was found that the position of the left eye's upper eyelid was good, there was still minimal swelling, with intact sutures.
 Discussion : Involutional entropion generally occurs in elderly patients over 60 years old and is more common in women. Progressive senile changes in the structure of the eyelid cause the occurrence of involusional entropion. Involutional entropion in the upper eyelid is associated with dermatochalasis. One management option for involutional entropion is ALR, which aims to pull the folded-in eyelid margin outward.
 Conclusion : This case shows that involutional entropion on the upper eyelid can still occur, albeit very rarely. ALR can be a simple and safe surgical option for patients with involutional entropion on the upper eyelid.

The effects of primary and secondary bacterial exposure on the seahorse (Hippocampus erectus) immune response

Evolutionary adaptations in the Syngnathidae teleost family (seahorses, pipefish and seadragons) culminated in an array of spectacular morphologies, key immune gene losses, and the enigmatic male pregnancy. In seahorses, genome modifications associated with immunoglobulins, complement, and major histocompatibility complex (MHC II) pathway components raise questions concerning their immunological efficiency and the evolution of compensatory measures that may act in their place. In this investigation heat-killed bacteria (Vibrio aestuarianus and Tenacibaculum maritimum) were used in a two-phased experiment to assess the immune response dynamics of Hippocampus erectus. Gill transcriptomes from double and single-exposed individuals were analysed in order to determine the differentially expressed genes contributing to immune system responses towards immune priming. Double-exposed individuals exhibited a greater adaptive immune response when compared with single-exposed individuals, while single-exposed individuals, particularly with V. aestuarianus replicates, associated more with the innate branch of the immune system. T. maritimum double-exposed replicates exhibited the strongest immune reaction, likely due to their immunological naivety towards the bacterium, while there are also potential signs of innate trained immunity. MHC II upregulated expression was identified in selected V. aestuarianus-exposed seahorses, in the absence of other pathway constituents suggesting a possible alternative or non-classical MHC II immune function in seahorses. Gene Ontology (GO) enrichment analysis highlighted prominent angiogenesis activity following secondary exposure, which could be linked to an adaptive immune process in seahorses. This investigation highlights the prominent role of T-cell mediated adaptive immune responses in seahorses when exposed to sequential foreign bacteria exposures. If classical MHC II pathway function has been lost, innate trained immunity in syngnathids could be a potential compensatory mechanism.

CEO foreign experience and corporate environmental, social, and governance (ESG) performance

AbstractThis research examines the impact of the Chinese CEOs with foreign experience from developed nations on the firm's environmental, social, and governance (ESG) performance, drawing on imprinting theory, stakeholder theory, and resource dependence theory. Using manually collected data of CEOs' foreign experience and corporate ESG data from the Bloomberg database for Chinese listed firms from 2011 to 2020, we observe that CEOs with foreign imprinting tend to improve their corporate ESG performance in China. The positive relationship between CEO foreign experience and corporate ESG performance is more significant when the CEO is female, when the CEO is more educated, and when the firm is state‐owned. To better understand the underlying influence, our study indicates that the influence of CEOs' foreign experiences on corporate ESG performance is primarily manifested in the advancement of corporate social and environmental responsibility. Section 4.3 reveals that experiences obtained from developed economies have a more pronounced impact on promoting firms' ESG performance compared to experiences gained in underdeveloped countries. This empirical evidence underscores the significance of foreign experiences gained in developed economies in driving firms' ESG performance. Overall, our research makes a contribution to the study of CEOs' foreign exposure and corporate ESG performance.

The Impact of RMB Exchange Rate Fluctuation on China's Air Conditioning Industry

Based on the background of China's current trade with other countries is becoming increasingly close, the study of exchange rate stability on the impact of China's trade with other countries to promote China's economic stability has a certain theoretical significance. In the study of air conditioning industry import and export trade factors affecting the attention of the national exchange rate is very important, in the two countries trade relations, the exchange rate is a measure of the two countries to buy, sell the price of the product of the vital factors, exchange rate changes for the enterprise will bring a certain degree of impact, stabilization of the exchange rate for the promotion of our country and the trade of other countries in the long term and good cooperation has important practical significance. The air-conditioning manufacturing industry is a very representative research object. The cost-sensitive home appliance industry is a labor-intensive industry, which provides a huge number of jobs for China and creates a huge amount of foreign exchange income. At the same time, the home appliance industry, as a representative of China's manufacturing industry, faces industrial upgrading pressure and is in the maturity of a fully competitive industry, which has been severely impacted by exchange rate changes. It is of great significance to correctly measure and analyze the foreign exchange risk exposure of the import and export of the air-conditioning industry and its influencing factors. From a micro point of view, enterprises can be based on foreign exchange risk exposure situation targeted adjustment of financial strategies, strategies and management methods. From a macro point of view, the country can be based on the overall foreign exchange risk exposure characteristics of home appliances to formulate the correct macroeconomic policy.

Determinants of Effective Financial Risk Management in Malaysian companies

This study was intended to create a theoretical framework of factors affecting the efficien-cy of financial risk management, including leadership, culture and communication. Litera-ture searches were conducted utilizing library databases and an analysis was made of pre-vious studies related to these topics. Foreign exposure is the major risk faced by infor-mation technology companies. The main reason for this is the substantial part of their in-come comes from foreign countries in foreign currencies. It is important to know here if Malaysian I.T. companies are suffering from loss due to foreign exchange movements, what measures they are taking to minimize risk, how much serious impact is suffered on its profitability. Also reviewed were models published by other authors in this field which were found most helpful in identifying how financial risk management can assist Root-square Technologies, the most rapidly growing, innovative I.T. Services & Enterprise I.T. company operated in Malaysia.

Surgical techniques for mini-laparotomy myomectomy

The prevalence of uterine fibroids is estimated to be approximately 80%. Fibroids can be associated with abnormal uterine bleeding, pressure symptoms, and infertility. Given this high prevalence, approximately 30,000 myomectomies are performed in the United States per year. Minimally invasive approaches are preferred, if feasible. The minimally invasive techniques include laparoscopic, robot-assisted, hysteroscopic, and mini-laparotomy. To discuss the multiple techniques for optimizing the use of mini-laparotomy in minimally invasive myomectomy. We use intraoperative surgical video to demonstrate techniques that optimize the use of the mini-laparotomy for myomectomy. Cleveland Clinic. Patient's undergoing fertility preserving, minimally invasive myomectomy at the Cleveland Clinic. The patient(s) included in this video gave consent for publication of the video and posting of the video online, including social media, the journal website, scientific literature websites (such as PubMed, ScienceDirect, and Scopus), and other applicable sites. After the surgeon has selected to proceed with mini-laparotomy myomectomy, different techniques can be employed to optimize management. We demonstrate and discuss these techniques to ensure that surgeons have a set of tools to tackle a fibroid uterus. These techniques include direct palpation of the fibroids, use of a uterine manipulator to visualize the endometrial cavity, use of the uterine manipulator to aid in repair of the cavity if entered, suturing technique that avoids the endometrial cavity and therefore limits foreign body exposure and decreases intrauterine adhesion formation, utilization of barbed suture in a layered fashion, in-situ debulking to avoid injury to fallopian tubes and other critical uterine structures, easy identification of the optimal enucleation plane, use of single hysterotomy for multiple fibroids, visualization of the "Tortuga" sign, and evaluation of the abdominal cavity using the mini-laparotomy site as a port site. To limit postoperative adhesion formation, the investigators place cellulose-based adhesion barriers with peritoneum closure. Although the need for prolonged postoperative observation can be made on a case-by-case basis, we consider this as an outpatient surgery and anticipate same-day discharge for our patients. In this video, we perform a mini-laparotomy myomectomy optimally and describe the techniques employed. Specific techniques employed in mini-laparotomy myomectomy make the case safe, effective, and can lead to same-day discharge. Mini-laparotomy myomectomy is a technique used to perform minimally invasive myomectomy. Following the discussed steps, surgeons can be more confident in performing this method of myomectomy.

Centrality in the macroeconomic multi-network explains the spatiotemporal distribution of country per-capita income

This paper empirically investigates the role played by cross-country spillovers in shaping spatiotemporal differences in country income. While existing literature focused on effects captured by direct spillovers with partner countries only, here we take a complex network perspective to explore whether the global embeddedness of countries in the macroeconomic multi-network may significantly impact income, net of country local characteristics such as local foreign exposure. We employ data for the period 2000–2020 to build a time sequence of 3-layer multi graphs, with countries as nodes and links weighted by the intensity of bilateral relations in international trade, finance and human migration. Using panel-regression techniques, we then ask if country (eigenvector) centrality in the multi network can account for parts of the observed heterogeneity in country per-capita income, both cross-sectionally and over time. Robustly across a number of alternative specifications of the empirical model, we find that being more central significantly boosts country income. This implies that income-enhancing technological spillovers are not only channeled via local exposure, but also through indirect interactions with more distant nodes.

Impairment of monetary policy independence by global financial cycles and the mitigating role of macroprudential policies

ABSTRACT In this paper, we study the impairment in monetary policy caused by different forms of global financial cycles. We find that while both equity inflows and outflows cycles do exert influence over monetary policy, the bond inflows cycle does not have a significant impact. Further, we discuss the role of macroprudential policies in mitigating this impairment by using Difference-in-Difference with heterogeneous treatment effects which is robust to presence of heterogeneity across both time periods and groups. We find that FX-based policies such as Capital Restrictions on Foreign Exchange positions and Limits on Foreign Exposure alongside SIFIs and Loan Loss Provisioning are effective in reducing the impairment.

Exposure to negative foreign COVID-19 news predicts lower support for immigration policy in China

We present a framework for studying the spillover effect of negative foreign COVID-19 news on attitudes towards immigration. Our framework proposes that exposure to negative COVID-19 news from foreign countries can activate negative associations with foreigners, reduce positive attitudes towards them, and increase perceived threat, ultimately leading to decreased support for immigration. We conducted three studies to test this framework. Study 1 found that exposure to negative COVID-19 news about a foreign country increased negative valence associations with that country. Study 2 showed that exposure to more negative COVID-19 news about foreign countries was associated with lower acceptance of immigration policies in real life. Study 3 replicated the spillover effect of negative news exposure using a scenario manipulation. The effects of negative news exposure on immigration policy acceptance in both Studies 2 and 3 were mediated by changes in foreigner attitudes and intergroup threat. Our results demonstrate the important spillover effect of negative foreign COVID-19 news exposure on immigration attitudes and highlight the association perspective as a foundation for understanding attitude changes during the COVID-19 pandemic.