There is scant evidence on how risk-taking incentives impact specific firm risks. This has implications for board oversight of managerial risk taking, firms' development of comparative advantage in taking particular risks, and compensation design. We examine this question for exchange rate risk....

We examine the effect of competition on exchange rate exposure using survey data from 55 countries. We find that exposure increases with the intensity of competition. Exposure is higher when firms face price competition in international and domestic product markets and when rivals compete using...

We use unique features of the private credit market to examine whether currency risk is a priced systematic risk at the firm level and, therefore, whether and how it affects firms’ financing. We find that currency exposure has a large impact on loan spreads. Decomposing loan spreads, we find...