Comparative analysis shows Ford's stock is sensitive to exchange rates, while BMW uses hedging to mitigate risk.
This paper examines the mechanism through which exchange rate fluctuations impact stock prices by comparing two major automotive export companiesFord and BMWfrom the United States and Germany. The study is based on stock price and exchange rate data from 2005 to 2024, employing time series regression methods to analyse their sensitivity to different exchange rates (e.g., USD/EUR, USD/JPY, etc.). The results reveal that Ford exhibits a significant positive response to exchange rate changes, particularly USD appreciation, indicating that its cost structure is highly sensitive to exchange rates. In contrast, BMW has significantly reduced the impact of exchange rate fluctuations on its stock prices through effective financial and operational hedging strategies. The study highlights the role of corporate hedging strategies and macroeconomic conditions in the exchange rate transmission process, contributing to empirical research on foreign exchange risk management for multinational corporations.
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Yuan et al. (2025) studied this question.
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