Empirical Study Of Foreigm Exchange Risk Exposure Of Coastal Smes In The Manufacturing Sector

Chinese started the second round of RMB exchange rate reform in 2010. On the one hand, a substantial relaxation of the RMB exchange rate volatility, on the other hand the RMB since the end of 2005 unilateral bullish trend, showing a fluctuation characteristics. Both aspects have led to the increase in business is not expected to change in the exchange rate, foreign exchange risk exposure significantly increased. SMEs in the business content, business management significant differences exist with large enterprises, SMEs need with features according to their exposure to foreign exchange risk and impact of special factors analysis.This paper analyzes China’s coastal areas around manufacturing SMEs in foreign exchange risk exposure and financial factors influence the degree of manufacturing SMEs to expand foreign exchange exposures.Firstly, foreign exchange exposure of content from the perspective of a split transaction currency risk exposure, foreign exchange risk exposure and total economic exposure to foreign exchange risks were compared. First, foreign exchange risk exposure distribution of the three aspects of the study, by stepwise regression method to determine the exposure to foreign exchange risk transactions, foreign exchange exposure risks to the economy, lagging the overall situation of foreign exchange exposure, the study found that companies trading exposure to foreign exchange risk, foreign exchange risk economy exposure to significant lag two periods, the total foreign exchange risk exposure does not exist companies lag situation.Trading in the foreign exchange risk exposure, the study found that 10.7% of SMEs in significant foreign exchange risk exposure. Industry distribution of foreign exchange risk exposure to significant business transactions in medical and biological pharmaceuticals, paper and printing industry have two, machinery and equipment industry has eight instruments, metal and nonmetal industry 4. Machinery and equipment instrumentation industry exist in the current forward foreign exchange exposure, the RMB appreciation will show a significant increase in the financial expenses. Exposure to foreign exchange risk from the economic point of view,13.9% of manufacturing SMEs in significant foreign exchange risk exposure. SME economic exposure to foreign exchange risks significant lag situation, the current foreign exchange risk exposure to significant economic enterprises,54% of which there is a significant lag two foreign exchange risk exposure. SME exchange risk exposure in terms of the current economy is still lagging two periods, the vast majority is positive, indicating that both in the current or long-term impact of the RMB exchange rate on business income is positive, the RMB appreciation will help increase business revenue. From the industry distribution, the foreign exchange risk exposure of SMEs concentrated in machinery and equipment, instruments and metal and nonmetal sub-sectors, namely, six, five. Manufacturing SMEs in total foreign exchange risk exposure situation, there is a significant risk of total foreign exchange exposure and foreign exchange risk exposure are positive, indicating that the total profits of the enterprise have a positive impact of 12% appreciation of the RMB business. The total foreign exchange risk exposure scattered distribution of manufacturing SMEs, covering the pharmaceutical and biotech pharmaceuticals, textiles and garments fur, metal and nonmetal, machinery and equipment, instruments and other sub-sectors.Combined with exposure to foreign exchange risk transactions, foreign exchange exposure risks to the economy, overall foreign exchange exposure direction and repeat business, this paper argues manufacturing SMEs were only a handful of companies (two) exposed to foreign exchange transactions carried out effective risk management, most enterprises passive acceptance of business income of RMB appreciation to bring positive influence to achieve a total profit of enterprises to benefit from the value of the RMB rate rise.In this paper, foreign exchange risk exposure affecting corporate financial factors were quantitatively analyzed. Select the enterprise sales margin from profitability, operational capacity, development capacity, solvency, etc., current ratio, debt ratio and firm size to study internal financial factors that influence foreign exchange exposures. Through the analysis of the sample companies, found that foreign exchange risk exposure mainly by sales margin, asset-liability ratio and affect asset size enterprises. Specifically, the sales margin and foreign exchange risk exposure of SMEs there is a positive correlation between corporate assets and liabilities higher the rate, the lower the level of foreign exchange risk exposure, corporate size and foreign exchange exposure was a significant positive correlation.