Influence Of Changes In Production Factors And Pass-through On Exchange Rate Exposure

As China continues to deepen its reforms and put forward new development concepts such as the “One Belt and One Road” and the Maritime Silk Road,the impact of the Chinese economy on the world is increasing.In this context,the degree of internationalization of Chinese companies is getting higher and higher,and the foreign-related components of Chinese companies are also increasing.Therefore,the impact of exchange rate fluctuations on Chinese companies is also increasingly significant.This article theoretically analyzes that the factors of production factors,commodity markets,and foreign exchange markets can influence each other through the information carrier.The price reflects the supply and demand of the market,and there are capital flows and goods flow in each market.If the production factor of a company is high in foreign-related elements,fluctuations in the exchange rate will affect the production costs of the company and thus affect the price of the goods.Cross-border trade exists in the commodity market,and the exchange rate will also directly affect the supply and demand of commodities between the import and export companies,thereby affecting the profits and value of the company.Through the construction of a cross-border trade model,the influence of the factor input after considering the pass-through on the exchange rate exposure of the company is described.Exchange rate fluctuations will result in the adjustment of factor prices or commodity prices,and companies will adjust their production structure and cross-border trade according to the actual situation of the company because of price fluctuations.The sample range selected in this paper is monthly panel data for 445 listed companies from January 2005 to December 2015,with a total of 132 periods.Through a variable coefficient regression of fixed effects of panel data,a quarterly time series is obtained for a total of 44 quarters.The empirical results show that the pass-through will promote exchange rate exposure;the greater the capital-labor substitution elasticity,the greater the exchangerate exposure;the higher the firm's profitability ?,the greater exchange rate exposure.Domestic capital-foreign capital substitution elasticity ?_? has no significant effect onexchange rate exposure.In the sample classification test,the exchange rate exposure of heavy industry was foundto be affected by the positive ?_p of the capital-labor substitution elasticity,and the exchangerate exposure of the light industry was negatively affected.Non-coastal regions,domestic capital-foreign capital substitution elasticity ?_? has a significant effect on exchange rateexposure and the pass-through.In the three dimensions,only the industry-level profit rate?has a significant effect on the exchange rate exposure and the pass-through.