On the changes of Foreign Exchange Rates and Firm Performance: Evidence from TAIEX-listed Companies Investing in ASEAN Countries

• Main Authors: Wei-Fang Chang, 張瑋芳
• Other Authors: 李丹
• Format: Others
• Language: zh-TW
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/6zhs26

碩士 === 國立中央大學 === 財務金融學系 === 107 === This study discusses under the "New Southward Policy" in the background, whether the performance of firm that investing in the ASEAN countries is affected by ASEAN countries' exchange rate changes. During the sample period, the currencies of ASEAN countries depreciated against the new Taiwan dollar. Therefore, when Taiwanese companies investing in the ASEAN countries, the performance of Taiwanese parent company will decrease in the short term but increase in the long term. The results show that when the ASEAN currency depreciates, the performance of companies investing in the ASEAN countries will increase. If we distinguish the ASEAN countries, we found that the performance of companies investing in Indonesia and Vietnam is more sensitive to exchange rate changes. We also find that companies investing in ASEAN countries have higher leverage ratios and lower performance. Based on the above results, it can be found that the exchange rate changes of the ASEAN countries will have an impact on the performance of Taiwanese companies. The main reason may be that Taiwanese companies are not mature enough to hedge against the ASEAN countries, e.g. Ruhong (1476), Dacheng (1210) and Zhengxin (2105). They only use forward foreign exchange contracts for the US dollar. Moreover, there are no derivative related to the US dollar on the Taiwan Futures Exchange, making it difficult for Taiwanese companies to hedge against the ASEAN currency.