Prague Economic Papers 2015, 24(6):729-743 | DOI: 10.18267/j.pep.532

Investigating Exchange Rate Exposure of Energy Firms: Evidence from Turkey

Serkan Yılmaz Kandir1, Ahmet Erismis2, Ilhan Ozturk3
1 Cukurova University, Faculty of Economics and Administrative Sciences, Department of Business Administration, Adana, Turkey (skandir@cu.edu.tr)
2 Cukurova University, Kozan Faculty of Management, Adana, Turkey (ahmetersimis@yahoo.com).
3 Cag University, Faculty of Economics and Business, Mersin, Turkey (ilhanozturk@cag.edu.tr).

This study investigates the exchange rate exposure of Turkish energy firms from 2002 to 2010. We employed a regression model that is constructed by adding exchange rate and oil price factors to Fama-French Three Factor Model. Empirical results suggest that exchange rate risk appears to impact energy firms diversely. Among the 9 energy firms in our sample, only 2 firms seem to be exposed to exchange rate risk. These two energy firms appear to have larger open foreign currency positions and do not use any hedging methods. On the contrary, rest of the energy firms that are not found to be affected by exchange rate risk either seem to have smaller open foreign currency positions or employ hedging methods to manage exchange rate risk. Overall, our results provide evidence that energy firms exposed to exchange rate risk share similar characteristics.

Klíčová slova: stock returns, exchange rate exposure, energy firms
JEL classification: G12, G32

Zveřejněno: 1. leden 2015  Zobrazit citaci

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Kandir, S.Y., Erismis, A., & Ozturk, I. (2015). Investigating Exchange Rate Exposure of Energy Firms: Evidence from Turkey. Prague Economic Papers, 24(6), 729-743. doi: 10.18267/j.pep.532
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