The impact of justified corporate governance changes against exchange rate exposure in North Cyprus
利用萨班斯-奥克斯利法案等法律要求的治理改革，研究公司治理绩效与汇率风险、对冲之间的关系，发现改善治理指数能降低汇率风险、增加净贸易和对冲。
Abstract This study seeks to use the legally required governance reforms of the Sarbanes‐Oxley Act of 2002, the Financial Reporting Council 2012–2018 and the EU COM 2012–2014 to investigate the relationship between corporate governance performance, exchange rate exposure and hedging by using two governance indexes based on a more comprehensive model previously constructed. The paper is one of the first to adopt the measures that state the importance of internal (corporate culture) and external (corporate legality) governance qualities that help prevent exchange rate exposure and improve trade and hedging. The examination is conducted by using the ARCH and ARMA models as well as a two‐factor and a multiple‐factor model to capture the variations that significantly account for variations in the exchange rate exposure, net trade, and stock market returns. Empirical results revealed that an improvement in corporate governance indexes is associated with a greater reduction in exchange rate exposure, an increase in net trade, and more hedging at the firm level. In addition, adoption of the corporate legality measures has a greater impact on exchange rate exposure and hedging than corporate culture measures.