How the Changes of Foreign Exchange affect the Financial risks of Multinational Corporations
Yukai Wang
Co-Presenters: Individual Presentation
College: College of Business and Public Management
Major: Finance
Faculty Research Mentor: Huaibing Yu
Abstract:
Our research primarily investigates the multifaceted impacts of exchange rate growth rates from various critical perspectives. In this paper, we specifically take the financial situation of Toyota Corporation during the 2008 global financial crisis as a representative case study, given the substantial financial risks that exchange rate fluctuations posed to the corporation at that time. By examining Toyota's experiences, the study aims to deepen our understanding of how exchange rate volatility directly influences multinational corporations. Furthermore, to ensure comprehensive and robust conclusions, we carefully review and reflect upon existing scholarly literature and insights provided by prominent financial and economic researchers who have explored related topics previously. Additionally, our methodological approach incorporates regression analyses based on empirical data sourced from five distinct multinational companies. Through this comparative analysis, we evaluate and contrast the selected financial case of Toyota with broader industry trends and experiences. Ultimately, our objective is to synthesize and articulate a well-rounded set of conclusions regarding the precise nature of the relationship between exchange rate fluctuations and the associated financial risks faced by multinational corporations.