Discovery at Carlson·29 How Foreign Rates Can Impact a Firm's Future

JULIANA SALOMAO

New research from Assistant Professor Juliana Salomao, titled “Exchange Rate Exposure and Firm Dynamics,” explores which types of firms choose to borrow in a foreign currency and which elect to do so in a local currency.
Salomao and her co-authors examined firms in Hungary, where they were able to study the balance sheets from every firm in the country. They found that only about 30 percent of the firms chose to borrow in euros, which would provide the firm with a lower rate.

What they found was that these firms tended to be more productive and able to tolerate more risk than an average firm. 

“Even though the base rate is lower for all firms to borrow in euros, once you compound that with the risk coming from the exposure of currency, only those firms that this risk is small is it worth it to borrow in euros,” Salomao says.
Firms that can tolerate more risk of being exposed to a currency that is not their own are the ones choosing to borrow in foreign currency. The research also found that since these firms were able to get lower financing rates, they were also able to grow faster than their competition.

“There is a real benefit to having access to this additional source of funds,” Salomao says.

In order to assure the correct firms are using this funding, there also needs to be a banking sector that is able to identify this risk. If banks were unable to identify this risk and gave more capital away to lesser firms, those bad decisions could depreciate the currency and lead to major defaults.

“The fact that the banks work well in identifying this risk and do allocate this cheaper funding to only the firms that can tolerate the foreign exchange risk shows that there’s a benefit to liberalizing the economy and allowing firms to borrow in a foreign currency,” she says. “This tells you that if countries are thinking about whether they should liberalize or reform their banking sector, understanding the risks of firms is really important.”

“Even though the base rate is lower for all firms to borrow in euros, once you compound that with the risk coming from the exposure of currency, it only makes sense for the firms that can handle that risk to borrow in euros,” Salomao says.
Understanding this concept could have far-reaching implications here in the United States. Because the U.S. dollar is the dominant currency in the world, if a foreign entity defaults on its loans, that country may choose to no longer invest in a foreign currency.

“It’s crucial to understand how the world’s economy is interconnected,” she says. “Although these financial shocks may be far away in China or in the European Union, understanding how those shocks are going to impact each other is extremely important.”

 

 

外币利率与企业前景

       “虽然欧元贷款的基准利率更低，但是考虑到相关的货币风险，只有风险承受能力较强的企业才有必要选择欧元贷款。”Salomao说。

        如果一家匈牙利企业寻求最低融资利率，它能找到的往往是外币贷款。那么，为什么一些匈牙利企业不走这条路，而是选择用匈牙利本土货币福林贷款呢？

        在题为《汇率风险与企业动态》的新研究中，卡尔森学院助理教授Juliana Salomao分析了以外币贷款和以本币贷款的企业的不同类型。

        Salomao和合著者研究了匈牙利的企业，调查了该国所有企业的资产负债表。他们发现，虽然欧元贷款利率更低，但只有约30%的公司选择以欧元贷款。并且，这些企业往往效益更好、风险承受能力更强。

       “虽然欧元贷款的基准利率较低，但是考虑到相关的货币风险，欧元贷款只对那些货币风险较小的公司有价值，”Salomao说。

       能够承受外币相关风险的企业，才会选择以外币贷款。研究还发现，由于融资成本较低，这些企业的增长也优于竞争对手。

       “（外币贷款）这一额外的融资来源，给企业带来了切实的好处。”Salomao说。

       为了确保贷款发放的对象是正确的，银行的风控部门必须能够识别上述风险。否则，银行可能错误地把贷款发放给资质较差的企业，最终造成货币贬值、导致重大违约。

       “事实上，银行的风险识别工作做得很好，这种低成本的资金确实只发放给了有能力承受外汇风险的企业。这一事实说明，经济自由化和允许企业以外币借款是有好处的。如果一个国家在考虑是否放开和改革银行业，那么了解企业风险很关键。”

       理解上述概念，对美国有深远的影响。美元是当今世界的主流货币，所以如果一个外国实体贷款违约，该国可能选择不再投资外币。

       “我们必须理解世界经济的内在关联，这一点至关重要。也许金融震荡远在中国或欧盟，但了解这些震荡的相互影响是极其重要的。”