Research On The Influence Of The Exchange Rate Fluctuation On The Value Of Company

With the rapid development of global economic, the international development strategy has become the development trend of many enterprises. Many international companies have chosen to enter the Chinese market to compete in the overseas market with local companies. In this highly competitive environment, exchange risk exposure is becoming increasingly prominent. Especially since the reform of the exchange rate system in July 2005, the analysis of impact of exchange rate fluctuations on enterprise value, strengthen the capacity of enterprises to cope with foreign exchange risk has great theoretical and practical significance for the Chinese enterprises integrating into international market.So the paper studies the correlation and the degree of correlation between exchange rate fluctuation and the firm value and explores the impact of exchange rate fluctuations, the mechanism of action and trends of changes to manufacturing industry in China. Based on research at home and abroad, the paper first analyses the concept of corporate value and exchange rates, laying the basis of the paper to start analyzing from its measure methods and impact factors. Secondly, the paper summarized the foreign exchange risk exposure characteristic in common and differences in different sub industry. The paper finds out exchange rate fluctuations are widely and deeply influencing manufacturing industry of China, but the impact on different sub industries in different degree. Compared with the classical model by regression analysis, the paper has proved a significant relationship between the exchange rate fluctuations and company values, and significant relationship between internal characteristics and the foreign exchange risk exposure.Therefore, Chinese enterprises should establish and consummate value management system and foreign exchange risk management system in time, maximizing the value of the enterprise as management objectives to improve the awareness of foreign exchange risk prevention, taking effective measures to develop exchange risk management, understanding the impact of exchange rate fluctuations on the enterprise value, making enterprises more competitive in the dramatic international market.