Research monographs

Corporate Performance and the Exposure to Macroeconomic Fluctuations

 

This book develops and presents in an easily comprehensible way the essential elements of a corporate strategy for managing uncertainty in the macroeconomic environment. This Macroeconomic Uncertainty Strategy – MUST – enhances firm value by allowing management and external stakeholders to distinguish between changes in the intrinsic competitiveness of the firm and changes in performance caused by macroeconomic fluctuations. These fluctuations - manifested as changes in exchange rates, interest rates and inflation rates - are beyond management’s control but they have a substantial impact on performance.

 

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Index

A                                                                            Bankruptcy cost 38,43,47

Accounting exposure 62, 69-70, 83, 166                   Barnea, A. 137

Accounting for hedge contract 189                            Bartov, E. 120

Accounting measure 31,52,60,67,196                         Beaver W.H. 235-236

Accounting net worth 167                                         Benchmarking 13,49,231,258-259

Accounting risk 31                                                   Best-case scenario 13

Accounting Standard Committee (ASC) 235             Bhandari, J.S. 123

Accounting standard 62, 64,                                      Bid-ask spread 164, 208

189, 232, 234-235, 238                                           Bierman, H. 236

Accounting translation exposure 62                           Bilateral measurement 89, 92

Accounting value 66,73,99, 263                                 BMW 134-135

Accounting-based exposure measure 192                  Bodnar, G.M. 120

Accounting-based performance measure 214             Bonds 34,172,184,206

Accounts payable 53, 59, 104                                    Bonus system 10, 214, 216, 223

Accounts receivable 53, 59, 104                                Book value 31,36-37,63,66-67,

Adams, J.B. 189                                                         70, 72, 127, 195

Adjustment cost 35, 128,225                                      Boyd, W. 87

Adler,M. 98,123                                                       Bretton Woods 17, 234

Advance payment 158                                              Bromwich, M. 236

After-tax translation gain 168                                    Budget 70, 111, 113, 128-129,

Aggregate demand 15, 18, 40, 73,                                139, 230, 26o, 262

105-106, 220, 241                                                  Budgeting decision 230

Agreement 225, 234                                                 Business condition 16,111,206

Aliber,R2. 235,236,241                                              Business risk 31,255

All-current (AC) method 65, 67,                                Business-cycle 39

82, 83, 86

Arnihud, Y. 120                                                       C

Annual report 13,62,121,128,135,137,                        Call option 47,159,162-163,

147-148, 154, 243-244, 247, 255                               185-187,224

Anticipated cash flow 70, 220                                  Campbell J.Y.  122.

Anticipated change 29, 224                                      Canadian Institute of Chartered

Arbitrage opportunity 34                                            Accountants (CICA) 235

Audi 21, 135                                                           Cape1 J.J. 46,213,230

Autocorrelation 130                                                 Capital mobility 11,22

Automotive industry 243,247,256                              Capital stock 18

                                                                              Car manufacturer 21,64,135-I36,

B                                                                             139,142

Balance sheet value 166                                          Cash flow effect 15-16, 106, 112-113,

Balance sheet 53,62,65-67,70,81,                                  125,143-I45,148,154, 178-179,

83-84,165-166,238,267                                              217-218, 225-227, 229

Bank loan 34                                                           Cash Flow at risk (CFaR) 77, 259-260

Bank of international settlements (BIS)                     Cash flow decomposition 218

31-32                                                                   Cash flow exposure 26,52-53,59-62,

Bankruptcy 34,36-38,46,76,                                          67-70, 72, 100-101, 104,108-109,

196-199,260                                                             118-119, 137,152, 175, 186,199, 205


282 Index

Cash Flow Return on Investment (CFROI)                Costs of goods sold 65, 101,

214, 228                                                                   104-105, 229

CEO's letter to shareholder 243                                 Country risk 33,39-40

Character of shock and disturbance 23                       Cover 50, 156-157, 159, 161-164, 175,

Cheap credit 173                                                          191-192,194

Choi, H. 235-236                                                       Craig, R. 237

Chrysler 256                                                             Credit assessment 196

Clark, F 237                                                              Credit line 31

Coefficient of sensivity 71-72, 77, 80,                        Credit risk 31-32

125 129-130,139,145,I54,217,                                  Credit term 41,211

227, 238, 240, 242, 244, 250,                                    Currency basket 91, 172

254, 259-260, 264-265                                            Currency composition 73, 121, 125, 137

Coefficient stability 130                                             Currency denomination 29,34,39,41,

Commercial cash flow 53,59-61,77,                                59, 63, 79, 94, 98, 100, 118-119, 125,

100,119,121-122,129,137,140-                                      128, 146-147, 153, 157, 165, 173,

141,143-148,174-175,177-178,                                     181, 201,204-205, 212

182,199,205,208                                                      Currency of invoice 41

Commercial exposure 56,72,77,121,                             Currency reserve 158

129,137,19I,202,208,211-212,236                              Currency risk 39-40,94-95,98

Commercial operation 21, 31, 35, 58,                          Current rate 64-65, 70, 82

70,72-73, 132, 143, 157,                                           Customer loyalty 48

174, 191-192, 200-201, 204,

2o6,208-212                                                           D

Commercial risk 19,31-33,40,259                                 Daimler Chrysler 256

Commodity arbitrage 89-90                                         Debt-holder 34, 38, 50

Commodity price index 179                                         Debt repayment problem 18

Commodity price risk 179                                           Degree of adjustability 73

Compensation scheme 16,36,223                                 Demand elasticity 142

Competitive position 13,20,58-6o,91,               Dempsey, S J. 237

93,107,135,192, 214,219                                           Depreciation 58,61,65,84,113-114,

Competitiveness 11, 12, 14, 26-27, 80,                                130, 137, 147, 151-152, 154, 219,

91-92, 99-100, 142, 209, 216, 223,                                   225,250,252

232, 240,247,253,258,265                                         Dillard, J. 234

Conflict of interest 193                                               Discount rate 33,44,71,196

Consolidated balance sheet 62                                    Discounted Cash Flow (DCF) 214,216

Consumer price 90-91, 140                                         Disinvestment 46

Consumption pattern  90                                             Dixit, A. 230

Contracted payment 52                                              Domestic inflation 49

Contractual exposure 53,267                                       Domestic interest rate 49, 114

Contractual flexibility 225                                           Domestic market 6o, 107, 201-202

Corporate law 36                                                       Downside risk 30,187

Corporate performance 11, 13, 26, 28,                        Dufey, G. 241

215, 237, 234, 240-241, 243-244,                             Dukes, R. 67, 234

252-253, 255, 257-258,260                                       Dumas, B. 98, 123

Corporate risk 28-29,33,49                                          Duration 16,73,75-77,229

Corporate tax 36                                                        DEM 21-22, 139, 142, 145, 149-150,

Cost factors 40                                                               153,185

Cost of capital 72,80,198                                             Demand condition 11,35,40,72,224

Cost of debt 78                                                          Debt 18,21,34,38,42-43,50,78-79,

Cost-benefit analysis 43, 49-50                                       92, 107, 110, 137, 146-148, 153, 157,

Costs of consultant 44                                                   165,172,205,236


Index 283

E                                                                              EVA 13,27,214,228-229,254,259

Earnings stability 34                                                   EMU 11, 14, 18

Economic exposure 12-14, 16, 23,                               Expected return 19, 33-34, 94, 161,

25-26, 44, 51-99, 129-193, 197,                                          201, 212

212, 159

Economic measure 52, 59-60                                      F

Economic performance 31                                         Factoring 158

Economic Value Added (EVA) 13, 27,                       Factory ship 46

214, 228-229, 254, 259                                            False hedging 169-170

Economic value exposure 51,60-62,                            Fama,E.E 122, 198

68,71                                                                     Federal reserve 16-17

Efficient financial market 33, 36,99,                            Filtered profit 49

163-164,188                                                           Filtering method 228

Einzig, P. 86                                                              Financial Accounting Standards Board

Electrolux 219-222, 225,227-228                                    (FASB) 63-65, 67, 82, 234-236, 247

Employees 34-36, 43, 49, 134, 184,                              Financial and economic integration 14,

200,217,258                                                               232

Employment level 43                                                  Financial cash flows 68,71,102,104,

Equity 20,34,43,50,66,78,83,85-86,                                  118, 122, 139, 145, 260, 263, 266

148, 189-190, 218, 223, 231, 254                              Financial contracts 41, 100-101, 153,

Equity index 20                                                             181,209,268

Equity issue 37                                                          Financial department 53

Eurc, 18, 93, 250-252                                                 Financial exposure 31, 56, 61, 145, 191,

Eurobond market 11                                                     213

European Monetary System (EMS) 17                        Financial exposure management 145

European Monetary Union 14,18                                Financial institutions 74, 157, 202, 254

Evans, P. 234                                                            Financial instrument 20,26,45,117,

Exchange control 95, 160-161, 266                                121,153,160,190,193,209,

Exchange rate exposure 19, 51-52, 65,                          235-236,260

67,70-73,80,101,105,107-109,116,                             Financial market 11, 18-19,31,33-34,

126,144-146,156,174-175,178,181,                              41, 51, 72, 95, 107, 135, 144, 153,

200-201,204,233, 264,287                                           161, 164, 174, 181, 191,195-196,

Exchange rate realignment 17,131                                 200-202,204,208,212,238,251,

Exchange rate regime 14,16,88,261                               263,266

Exchange rate risk 14, 19, 39-41, 120,                        Financial risk 31, 33, 170, 196

123, 127, 174-I75, 200, 209, 224, 264                    Financial structure 119, 128-129,

Exchange rate variability 40                                          137,146,148,212

Exercise price 45, 47-48                                            Firm-specific factor 23

Expected bankruptcy cost 43                                     Fiscal authority 40

Expected cash flow 44, 68, 70, 108, 111,                   Fiscal deficit 17, 114

113,129,168,186,201,216                                         Fiscal policy 17, 79, 111, 114, 116, 124

Expected exchange rate change 41,                           Fixed exchange rate 17-18,172

94-97                                                                    Fixed rate loan 173, 204

Expected inflation rate 41, 206                                   Flexible exchange rate 51, 78,144

Export financing arrangement 158                             Flexible interest rate 146

Export price index 90-91                                           Floating rate 152, 154, 173

Export-oriented firm 12                                             Folks, M. 234

Exposure management strategy                                 Ford 133-134

21-22,194,199,202,208,211                                      Forecasting 16, 29, 98, 143,204,

Exposure management tool 59, 211                              206, 208, 251

External hedging 22                                                  Foreign competitor 61

External reporting 154,232,243,                                  Foreign currency flows 60

254-255,258


284 index

Foreign currency payment 44, 164                            Implicit index 90

Foreign direct investment decision 46                       Income statement 65-67, 84-85,

Foreign interest rate 19, 113, 132                                 137,190

Forward contract 41, 44, 48, 59, 137,                      Index category 90-91

152, 157, 159-160, 162-170, 176,                            Indexation 153, 184, 204, 264

178, 181, 184-188, 205, 267                                   Industry-relative price 140-141

Forward cover 159, 162-164                                    Industry-specific risk 39

Forward exchange rate 44, 95                                  Inflation differential 42, 109, 145

Forward market 21, 107, 145, 153,                            Inflation exposure 70, 80, 109, 145, 148,

160-162, 164-165, 169, 176, 186, 197                        174-175,182,184,202,204,259,264

Francis, J. 236                                                         Inflation rate 14, 16-20, 29, 39-42,

Frenkel J. 86                                                             78-80, 88, 108-109, 116, 124, 140,

Functional currency 63-65, 98                                     142, 148, 172, 175, 184, 202, 206,

Funding cost 43                                                         220, 225, 232, 235, 241, 259-260

Fund-raising cost 34                                               Inflation risk 39, 79, 104, 170, 172,

Future receivable 158                                                174-175,18I-183,202

                                                                             Inflation-linked (indexed) bond 184

G                                                                          Inflation-linked security 184, 202, 206

GAAP 154                                                            Information cost 33

Gamma 180                                                           Information gap 231

Garner, K. 98                                                         Information release 233, 240, 250,

GDP 15, 241                                                             254-255

Genberg, H. 123                                                    Information requirement 195-196, 206,

General Motors 134                                                   208,212,264

Geske, R. l23                                                        Insurance policy 39

GNP deflator 90-91                                               Interest payment 74, 137, 174

Goods market 201                                                 Interest rate differential 41, 94-98, 149,

Goodwin,T. 123                                                         151,154

Gow, I.D. 228                                                       Interest rate exposure 175, 178,

Government authority 36,49,258                                  181-183, 202, 204, 206

Gundy 212                                                            Interest rate exposure measure 51,

                       72-73,77,80

H                                                                         Interest rate futures contract 170, 172,

Hedge contract 104, 151, 153-154,                              174-175

156,168-169,175-183,185-187,                             Interest Rate Parity (IRP) 95, 161-162,

189-191,193                                                           164

Hedging decision 50, 80, 121, 259                            Interest rate risk 38, 74, 76, 79, 127,

Hedging operation 107,125,239                                   171-172, 174, 182-183, 202, 204,

Historical rate 64-65, 67                                             206,259

Hodder, J.E. 98                                                     Interest rate swap 171-173,181

Holders of the firm's debt 34                                  Internal control 32

Home jurisdiction 235                                            Internal evaluation 199

Home market price 58                                           Internal pricing routine 158

Hostile take-over 43                                              International Accounting Standards Com-

Huefner, R.J. 235                                                     mittee(IASC) 189,232.,235,240

Hunt, H.G. 237                                                     International Fisher Parity (IFP) 19, 41,

                      78,94-95,97-98,161,163-164,170,

I                                                                                   201-208,241,255,264,266

IASC (International Accounting Standards             Intra-EMU transaction 14

Committee) 189, 232, 235, 240                            Intrinsic growth 252

Ibrahimi, F 123                                                      Intrinsic level of cash flows 217

Ijiri, Y. 235                                                           Inventory cost 35


Index 285

Investment strategy 52                                          Macro shock 70, 43, 131, 225

Invoice currency 53,59,268                                    Macroeconomic exposure 11-14, 16,

Irreversible cost 14, 210                                           23, 25-26,51-99,129-193,197,

                                                                               212, 259

J                                                                              Macroeconomic fluctuation 13, 20, 23,

Jilling, M. 134                                                          28, 49, 80, 120, 197, 214-222, 230,

Job security 35-36, 38, 43, 149, 200                           233, 240, 241, 253-254

Jorion, P. 89, 120, 122-123                                    Macroeconomic risk 14, 19, 24-28,

                      39-40, 49-50, 154, 184, 233, 255

K                                                                       Macroeconomic scenario 107,117,125,

Keim, D.B. 123                                                      143, 252-253,265

Kennedy, C. 236                                                  Macroeconomic shock 14, 100-101,

Ketz, E. 235                                                           104, 111, 114-116, 127, 143-144,

Keynes, J.M. 88                                                     227,241,257-258

KLM  20                                                            Macroeconomic Uncertainty Stra-

Kulatilaka, N. 46, 210                                              tegy (MUST) 12, 24-25, 27, 78, 80,

                                                                             215-216, 227, 233-234, 240, 242,

L                                                                           251,254-255,257,259-260,262,

Labour cost 23, 61, 90-91, 197, 210                          264-268

Labour force 18                                                  Macro-generated profit opportunity 19

Lagged exchange rate change 120                       Madden, B.J. 228

Largay, J.A. 235                                                 Mahdavi, S. 235

Law of One Price (LOP) 19, 87, 20                      Makar J.D. 235-236

Leaning against the wind 152,155                         Management objective 34, 45, 126, 195

Learning mechanism 95                                      Managerial compensation scheme 26

Leasing 158                                                        Market equilibrium relation 17, 19

Legal expertise 44                                              Market participant 36,41,67,164

Legal risk 31-32                                                  Market price 19,31,35,41,58,72,92,

Lenders 39, 49, 79, 172, 258                                   109, 111-118, 121-122,124,131,

Lessard, D.R. 22,122,230                                       139,143,163,175,177,179,181,

Level of aggregation 100, 118, 130                          190,195,206,208,260

Liability 31-32, 34-35, 50, 64-66, 73-                 Market risk 20, 31

77, 80, 100,119, 121, 125, 128,137,                  Market risk premium 20

146,161,164-66,168,173-174,                            Market share 64, 92,103,177,210

189-190, 193, 212,218, 234-235,259                Market valuation 67, 120, 190

Lightstone, B. 122                                              Market Value Added (MVA) 13, 27, 215

Lim, D. 138                                                       Marketing effort 48

Linear decomposition of cash flows 225              Mark-up pricing strategy 101-103,

Liquidity 31-32, 37, 43, 199                                     105-106

Long-term contract 35                                       Marston, R.C. 103

Long-term debt 78-79,137,146-148,                   Maturity gap 73-74

153, 157, 165,172, 205                                     Maturity of debt 78

Long-term fixed interest rate 171                        Maturity preference 79

Long-term intrinsic profit 258                              McCormick,J. 228

Lorange, P. 230                                                 McNown, R. 235

Loss of reputation 47                                         Mercedes Benz 135,256

                                                                             Milgrom, R. 228

M                                                                     Miller, M.  213

MacDonald, R. 95                                             Mismatch of maturity 166

Macro policy change I14, 116-118,                      Mitsubishi 133-134

121,124                                                          Modified duration 73, 75-77


286 index

Monetary policy 15-18, 38, 105,241                P

Monetary shocks 11,16                                     P/E ratio 13,215

Money market cover 162,164                            Pass-through 58,211

Money supply growth target 16-17                    Pattern of pay-off 188

Money supply target 17                                    Payment profile 163

Montesi, J. 189                                                Pegged exchange rate 17, 145-146

Multilateral measurement 89, 92                        Performance analysis 26, 238, 260

Multinational corporation 62                              Performance assessment 216, 222-227,

Murdoch, R. z34                                                 268

MUST-analysis 78, 80, 215-216,                        Performance measure 49, 214-2I5,

227,233-234,240, 241, 251,                                224, 226-228, 258-259

254-255,257-268                                           Performance measurement 26, 223, 225

MVA 13, 27, 215                                             Permanent shock 118

                                                                       Peso-problem 149, 151, 155

N                                                                    Peterson, S. 236

Near-term cash flows 60,196, 263                     Pigott, C. 89

Nominal exchange rate 111,142,235,                Pindyck, R.S. 123, 230

241-242                                                        Policy reaction 16

Nominal interest rate change 42                        Policy regime 23, 40, 130-131

Non-contractual exposure 31-32,259                 Policy-generated macroeconomic distur-

Non-financial firm 31-33,271                                bance 15

Non-indexed loan 79                                        Policy-generated shock 17-18

Non-policy-generated macroeconomic              Political regime 40

disturbance 15                                              Political risk 16,40,95,130,160,

Non-policy-generated shock 16, 18                       235-237,242,261-262

Non-quantitative response 239                          Portfolio return 30

Non-traded good 89-91                                     Portfolio risk 33,38

                                                                       Prakash, P. 236

0                                                                     Predictability of cash flows 43

O'Byrne, S. 229                                               Present value 4,1, 60, 65, 68, 70,

Oil price change 228,260                                      74-75, 108, 168, 193, 197-198,

Open economy model 229                                    216,224

Operational decision 24, 129, 194                      Price and quantity effect 53, 58-61, 71,

Operational department 53                                   73, 80, 98, 107, 261

Operations risk 31-32                                       Price earnings (p/e) ratio 13, 215

Opportunity cost analysis 50                             Price uncertainty 48, 196

Option contract 47, 160, 179                             Price-sensitive market segment 21

Option theory 45                                              Pricing of risk 41

Option value 180                                              Pricing Policy 36

Options cover 163                                            Pricing strategy 13, 48, 58, 63, 101-

Options in swap 174                                            102,105-107,125,128,135,211

Options pricing 45-46, 209                                Probability of bankruptcy 37-38,76,

Out-of-sample evaluation 135,155                         196-199,260

Out-of-sample period 151,155,                          Probability of default 34,36

220, 222                                                       Probability of ruin 34, 37-38, 43,76

Output fluctuation 35                                        Producer price index 90-91, 140, 145

Output level 35, 200                                         Production costs 21-22, 102-103, 106

Outside shareholder 232-234,241,                      Production level 35

247, 250 252-255                                           Production site 21-22, 134, 200,

Oxelheim, L. 12, 22, 94-95, 112, 122,                    209,224

155, 193, 198, 211, 228, 230, 233,                    Production volume 21, 224

235-236, 241, 255, 261                                   Productivity 18, 40, 105


index 287

Profit opportunity 19, 31, 78, 81, 100,              Risk-aversion 36-37, 48, 186, 196,

171,187,195,204,208,210,212                             198-199

Profitability 28, 61, 152, 154,201,                       Risk-free rate 205

209-210,254                                                 Risk-neutral 33-35, 128, 163-164,

Project evaluation 46, 210                                     199-204,206-208

Pulp industry 243, 247                                     Roberts, J. 228

Pulp manufacturer 63, 64                                Roll, R. 89, 123

Purchasing Power Parity (PPP) 19, 42,            Roll-over credit 79

86-92, l22, 205, 209, 241, 255, 263              Rolls Royce 243, 245

Put option 48,159-160,162,185,188                   Ronen, J. 237

                                                                     Rosenfeld, P. 236

Q

Quantity effect 53, 58-61, 71, 73, 80,               S

98,107,261                                                  SAAB 134

                                                                 Sadan, S. 237

R                                                                 Sales price 35, 57

Range forward 188                                        Sales revenue 54-55, 58, 135-139,

Rappaport, A. 27,228                                         141-144,149-152,154

Raw material price 140                                 Sales volume 13, 58, 101-103, 105,

Real effective exchange rate 91, 142                  139, 145,153, 200

Real exchange rate 12, 17, 39, 86, 89,            Samuelson, R.A. 236

91-92,94, 101, 109, 114, 122-123               SAS 20

145,148,183,200,2IO,224,235,                      Scania 244

264,266                                                     Scenario analysis 26, 41, 101,112,117,

Real option 14,23,35,46,192,                                119,121,124,153,238,261

196-197, 209,212,216, 224-226,                   Schmidt, E 236

228-230,266                                              Schroeder, W. 237

Real wage cost 46                                        Schwert, W. 122

Regulation FD z54                                        Seasonal factor 140, 146

Relative labour cost 2-3, 61, 210                    SEAT 21-22

Relative PPP 88, 92                                      Securities and Exchange Commission 254

Relative price coefficient 114                        Selective hedging 195,206,266

Relative product price 132                             Selective strategy 208

Renault 134                                                  Sercu, P. 236

Renegotiation 158                                         Shank, J. 234

Required rate of return 33                             Shapiro, A. 22,35,98

Revenues 18, 21, 54-55, 57-58,                      Shareholder Value Analysis (SVA) 13,

104-105,135,137,139,14I-144,                          27,228,259

149-152, 154, 158, 196, 219, 229                 Shareholders' wealth 38, 195-196

Revolving loan 74, 97                                    Short-run variability 65

Risk attitudes 194-195, 199, 202, 206,             Short-term loans 59, 79, 129

209,212,263                                               Short-term profit maximization 36

Risk diversification 33                                   Short-term security 79

Risk factor 37,40,44,116,229                          Skoda 22

Risk management programme 28,                  Solnik, B. 121-123

43-44,49-50,117,194                                   Sources of instability 130-131

Risk management strategy 41,156,206,         Sourcing 225

241,264                                                     Special Drawing Right (SDR) 172

Risk premium 20,33,41,94-95,201                   Speculative contract 168, 191, 193

Risk profile 186-187                                      Speculative opportunity 202

Risk reduction 43, 45, 172                             Speed of price adjustment 22

Risk-averse behaviour 35, 38                         Spot contract 157


288 index

Spot exchange rate 44, 95                            U

Srinivasulu, S. 22, 241                                  Unanticipated change 28-30,39-40,

Stakeholder 11, 13, 27-28, 33-36, 49,                 70-71, 100, 111-112, 115, 129, 133,

67, 152, 154, 193-194, 196, 199,                      139, 151, 198, 220, 223, 228

231-232, 255, 257-258, 260, 263,             Unexplained variance 183

265, 268                                                  Unit labour cost measure 91

Stambaugh, F. 123                                      Unsystematic risk 30

Standard No. 8 234                                     Upside risk 30

Stanko,B.B. 235-236                                   USdollar 12.,17,30,63,65,97,159,

Staubus,G. 235-236                                         251

Sterling, R.R. 236

Stewart, B. 228                                          V

Stickney, C.P. 235-236, 241                         Valuation effect 58-59,61,71-73,261

Stockholder 34, 62, 78, 219                          Value at risk 38,73,76-77,259-260

Stock-market value 31,62,67-68,                  Value enhancement 194

120-121,128,198, 212                                Value maximization 36

Stonehill, A. 98                                           Value of asset 164

Strategic management 13                            Value-added 91

Strategy choice 81                                      Value-based Management (VBM)  26,

Sunder, S. 236                                                214-216, 222,228

Support system 43                                      Variability of cash flow 46, 44, 152,

SVA 13, 27, 228, 259                                      197-199

Swap arrangement 158                                Variance reduction 197-198, 166, 268

Swaption 188                                               Vickrey, O.W 23 5

Sweeney, J. 89, 236                                     Volatility of exchange rate 234,257

Synthetic forward contract 181                     Volkswagen 21

Systematic risk 30                                        Volvo Cars 58, 111, 124-154, 197-198,

             218

T                                                                Vulnerability of corporate performance

Tactical decision 45, 268                                 241

Tax advantage 43

Tax consideration 157, 167, 170, 189          W

Tax shield 43, 102-103,106                          Wages 46,101,200-201, 225, 253

T-bill 95, 181-182                                        Wallace, S. 235

Term structure of interest rate 171,              Walsh, P. 237

201, 264                                                  Wang, W. 237

Term of trade 89                                        Watts, R. 237

Theta 180                                                   Weissenreider, 228

Three-month forward exchange rate 44        Westwick, C.A. 236

Time horizon of exposure 41, 128                 Wholesale price index 90-91

Tradable security 31                                   Wihlborg,C. 12,22, 112,122,155,193,

Trade credit 211                                              200, 228, 230, 235, 241, 261

Trade imbalance 17                                     Wolfson, A. 235-236

Transaction Cost 44, 88, 95, 188, 208

Transaction exposure 52-58, 60-61, 68,         Z

70,104,157,159-161,168                              Zeller, T.C.  235-236

Translation rate 66, 68                                   Zhou, S. 235

Trigger level 184, 225-227, 230                      Ziebart, D.A. 235-236

Trigger point 120                                          Zimmerman, J. 237

Translation method 52, 64-66, 165

Target variable 34, 148, 195-196,199,

201-202, 212, 250, 263

Trade policy 16, 19

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IFN at the top

 

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The Research Institute of Industrial Economics, IFN, is a private and independent foundation devoted to pursuing highly relevant research for trade and industry.

The researchers at IFN are united in their belief that economic methods offer a powerful tool for understanding society.

The main research programs are:

  1. economics of entrepreneurship
  2. globalization and corporate restructuring
  3. economics of the service sector
  4. economics of the electricity markets
  5. economics of institutions and culture.

Global Award

Research on entrepreneurship

 

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The Global Award for Entrepreneurship Research is the foremost global award for research on entrepreneurship.This Prize is awarded annually with a prize sum of EUR 100,000.

IFN in cooperation with Entreprenörskapsforum and Vinnova are the principals of the award, in cooperation with the donor, Stockholms Köpmansklubb.

Professor Philippe Aghion, Collège de France, is the winner of the Global Award for Entrepreneurship Research 2016. He will receive the award at a ceremony on May 10, 2016, in Stockholm.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se