{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/97755"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/97755","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"Essays in international corporate finance","abstract":"This dissertation comprises two essays that study the link between corporate exposure to international markets, liquidity management and hedging through debt in foreign currency. Chapter 1: Currency Exposure and Liquidity Management. Exchange rate movements present many risks for globalized companies, such as unexpected liquidity shortfalls that reduce their ability to undertake profitable investments. How does currency risk affect the liquidity policy of highly globalized firms? In this chapter, I present and test the hypothesis that globalized firms with high currency exposure hold more cash relative to credit lines as a precaution to these adversities. I show that high currency risk increases the cost of credit lines for U.S. firms, and strengthens the relative use of cash as the main liquidity provider. This result is robust to several measurements of currency exposure. Moreover, in times of high volatility on currency markets, reliance on cash increases for highly-exposed firms, but not for less-exposed ones. These results link the literatures of liquidity management and corporate policy under currency risk. Chapter 2: Cash Retentions from Debt in Foreign Currency: A Hedging Instrument. Companies that issue debt in foreign currency (DFC) and convert the proceedings back to their original currency create a hedging instrument that offsets volatility on foreign income. In this chapter, I evaluate if American multinationals and exporters use this hedging mechanism by holding more cash from their DFC issuances as compared to their U.S. dollar-denominated debt issuances. I find evidence that multinationals and exporters indeed use this mechanism. I show that for every monetary unit raised in foreign currency debt, these companies retain 3.49x more cash than they do for regular U.S. dollar debt issuances. Exploiting firms' heterogeneity to investigate potential characteristics that intensify this channel, I find that cash retention is more pronounced for companies that have no alternative hedging instruments (e.g. derivatives or lines of credit), and for debt issuances on floating currencies, as opposed to currencies from countries with managed exchange rate regimes.","abstract_html":"This dissertation comprises two essays that study the link between corporate exposure to international markets, liquidity management and hedging through debt in foreign currency. Chapter 1: Currency Exposure and Liquidity Management. Exchange rate movements present many risks for globalized companies, such as unexpected liquidity shortfalls that reduce their ability to undertake profitable investments. How does currency risk affect the liquidity policy of highly globalized firms? In this chapter, I present and test the hypothesis that globalized firms with high currency exposure hold more cash relative to credit lines as a precaution to these adversities. I show that high currency risk increases the cost of credit lines for U.S. firms, and strengthens the relative use of cash as the main liquidity provider. This result is robust to several measurements of currency exposure. Moreover, in times of high volatility on currency markets, reliance on cash increases for highly-exposed firms, but not for less-exposed ones. These results link the literatures of liquidity management and corporate policy under currency risk. Chapter 2: Cash Retentions from Debt in Foreign Currency: A Hedging Instrument. Companies that issue debt in foreign currency (DFC) and convert the proceedings back to their original currency create a hedging instrument that offsets volatility on foreign income. In this chapter, I evaluate if American multinationals and exporters use this hedging mechanism by holding more cash from their DFC issuances as compared to their U.S. dollar-denominated debt issuances. I find evidence that multinationals and exporters indeed use this mechanism. I show that for every monetary unit raised in foreign currency debt, these companies retain 3.49x more cash than they do for regular U.S. dollar debt issuances. Exploiting firms' heterogeneity to investigate potential characteristics that intensify this channel, I find that cash retention is more pronounced for companies that have no alternative hedging instruments (e.g. derivatives or lines of credit), and for debt issuances on floating currencies, as opposed to currencies from countries with managed exchange rate regimes.","abstract_has_math":false,"creators":["D'Almeida, Fabricio R. R."],"institution":"University of Illinois at Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Finance","degree_department":null,"school":null,"contributors":["Almeida, Heitor","Pennacchi, George G.","Johnson, Timothy C.","Choi, Jaweon"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2017,"date_issued":"2017-08-10T20:33:16Z","date_published":"2017-08-10T20:33:16Z","updated_at":"2026-07-22T22:24:34Z","subjects":["Currency risk","Liquidity management","Debt in foreign currency","Hedging"],"languages":["en"],"rights":["Copyright 2017 Fabrício R. R. d’Almeida"],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"http://hdl.handle.net/2142/97755","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Almeida, Heitor","Pennacchi, George G.","Johnson, Timothy C.","Choi, Jaweon"]},{"key":"dc:creator","label":"Author","values":["D'Almeida, Fabricio R. R."]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2017-08-10T20:33:16Z","2019-08-11T09:15:24Z","2017-04-21","2017-05"]},{"key":"dc:type","label":"Dc Type","values":["text"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Finance"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois at Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Currency risk","Liquidity management","Debt in foreign currency","Hedging"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["en"]},{"key":"dc:rights","label":"Dc Rights","values":["Copyright 2017 Fabrício R. R. d’Almeida"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["http://hdl.handle.net/2142/97755"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["This dissertation comprises two essays that study the link between corporate exposure to international markets, liquidity management and hedging through debt in foreign currency. Chapter 1: Currency Exposure and Liquidity Management. Exchange rate movements present many risks for globalized companies, such as unexpected liquidity shortfalls that reduce their ability to undertake profitable investments. How does currency risk affect the liquidity policy of highly globalized firms? In this chapter, I present and test the hypothesis that globalized firms with high currency exposure hold more cash relative to credit lines as a precaution to these adversities. I show that high currency risk increases the cost of credit lines for U.S. firms, and strengthens the relative use of cash as the main liquidity provider. This result is robust to several measurements of currency exposure. Moreover, in times of high volatility on currency markets, reliance on cash increases for highly-exposed firms, but not for less-exposed ones. These results link the literatures of liquidity management and corporate policy under currency risk. Chapter 2: Cash Retentions from Debt in Foreign Currency: A Hedging Instrument. Companies that issue debt in foreign currency (DFC) and convert the proceedings back to their original currency create a hedging instrument that offsets volatility on foreign income. In this chapter, I evaluate if American multinationals and exporters use this hedging mechanism by holding more cash from their DFC issuances as compared to their U.S. dollar-denominated debt issuances. I find evidence that multinationals and exporters indeed use this mechanism. I show that for every monetary unit raised in foreign currency debt, these companies retain 3.49x more cash than they do for regular U.S. dollar debt issuances. Exploiting firms' heterogeneity to investigate potential characteristics that intensify this channel, I find that cash retention is more pronounced for companies that have no alternative hedging instruments (e.g. derivatives or lines of credit), and for debt issuances on floating currencies, as opposed to currencies from countries with managed exchange rate regimes.","Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2019-05-01","The student, Fabricio D'Almeida, accepted the attached license on 2017-04-20 at 18:13.","The student, Fabricio D'Almeida, submitted this Dissertation for approval on 2017-04-21 at 01:04.","This Dissertation was approved for publication on 2017-04-21 at 08:53.","DSpace SAF Submission Ingestion Package generated from Vireo submission #10937 on 2017-08-10 at 15:06:37","Made available in DSpace on 2017-08-10T20:33:16Z (GMT). No. of bitstreams: 2 DALMEIDA-DISSERTATION-2017.pdf: 2322865 bytes, checksum: 7e7944b1e705a002518c4fc88c01dac7 (MD5) LICENSE.txt: 4215 bytes, checksum: fa4b713bf5eb143e1cab2bb367d0863d (MD5) Previous issue date: 2017-04-21","Embargo set by: Colleen Fallaw for item 102808 Lift date: 2019-08-10T21:27:21Z Reason: Author requested U of Illinois access only (OA after 2yrs) in Vireo ETD system","U of I Only Restriction Lifted for Item 102808 on 2019-08-11T09:15:24Z."]},{"key":"dc:format","label":"Dc Format","values":["application/pdf"]},{"key":"dc:title","label":"Title","values":["Essays in international corporate finance"]}]}],"canonical_facts":{"dc:contributor":["Almeida, Heitor","Pennacchi, George G.","Johnson, Timothy C.","Choi, Jaweon"],"dc:creator":["D'Almeida, Fabricio R. R."],"dc:date":["2017-08-10T20:33:16Z","2019-08-11T09:15:24Z","2017-04-21","2017-05"],"dc:description":["This dissertation comprises two essays that study the link between corporate exposure to international markets, liquidity management and hedging through debt in foreign currency. Chapter 1: Currency Exposure and Liquidity Management. Exchange rate movements present many risks for globalized companies, such as unexpected liquidity shortfalls that reduce their ability to undertake profitable investments. How does currency risk affect the liquidity policy of highly globalized firms? In this chapter, I present and test the hypothesis that globalized firms with high currency exposure hold more cash relative to credit lines as a precaution to these adversities. I show that high currency risk increases the cost of credit lines for U.S. firms, and strengthens the relative use of cash as the main liquidity provider. This result is robust to several measurements of currency exposure. Moreover, in times of high volatility on currency markets, reliance on cash increases for highly-exposed firms, but not for less-exposed ones. These results link the literatures of liquidity management and corporate policy under currency risk. Chapter 2: Cash Retentions from Debt in Foreign Currency: A Hedging Instrument. Companies that issue debt in foreign currency (DFC) and convert the proceedings back to their original currency create a hedging instrument that offsets volatility on foreign income. In this chapter, I evaluate if American multinationals and exporters use this hedging mechanism by holding more cash from their DFC issuances as compared to their U.S. dollar-denominated debt issuances. I find evidence that multinationals and exporters indeed use this mechanism. I show that for every monetary unit raised in foreign currency debt, these companies retain 3.49x more cash than they do for regular U.S. dollar debt issuances. Exploiting firms' heterogeneity to investigate potential characteristics that intensify this channel, I find that cash retention is more pronounced for companies that have no alternative hedging instruments (e.g. derivatives or lines of credit), and for debt issuances on floating currencies, as opposed to currencies from countries with managed exchange rate regimes.","Submission published under a 24 month embargo labeled 'U of I Access', the embargo will last until 2019-05-01","The student, Fabricio D'Almeida, accepted the attached license on 2017-04-20 at 18:13.","The student, Fabricio D'Almeida, submitted this Dissertation for approval on 2017-04-21 at 01:04.","This Dissertation was approved for publication on 2017-04-21 at 08:53.","DSpace SAF Submission Ingestion Package generated from Vireo submission #10937 on 2017-08-10 at 15:06:37","Made available in DSpace on 2017-08-10T20:33:16Z (GMT). No. of bitstreams: 2 DALMEIDA-DISSERTATION-2017.pdf: 2322865 bytes, checksum: 7e7944b1e705a002518c4fc88c01dac7 (MD5) LICENSE.txt: 4215 bytes, checksum: fa4b713bf5eb143e1cab2bb367d0863d (MD5) Previous issue date: 2017-04-21","Embargo set by: Colleen Fallaw for item 102808 Lift date: 2019-08-10T21:27:21Z Reason: Author requested U of Illinois access only (OA after 2yrs) in Vireo ETD system","U of I Only Restriction Lifted for Item 102808 on 2019-08-11T09:15:24Z."],"dc:format":["application/pdf"],"dc:identifier":["http://hdl.handle.net/2142/97755"],"dc:language":["en"],"dc:rights":["Copyright 2017 Fabrício R. R. d’Almeida"],"dc:subject":["Currency risk","Liquidity management","Debt in foreign currency","Hedging"],"dc:title":["Essays in international corporate finance"],"dc:type":["text"],"thesis:degree_discipline":["Finance"],"thesis:degree_level":["Dissertation"],"thesis:degree_name":["Ph.D."],"thesis:institution_name":["University of Illinois at Urbana-Champaign"]},"updated_at":"2026-07-22T22:24:34Z"}