Internationalization, foreign exchange exposure and firm risk

This paper examines the effect of internationalization on variation in operating performance. Analyzing a sample of non-financial firms in Switzerland during 2000-2020, we document two key findings. First, internationali-zation is positively associated with variation in operating performance. However, neither operational-hedging internationalization nor revenue-seeking internationalization moderates the relation between internationaliza-tion and variation in operating performance. Second, our findings show that the unhedged foreign exchange exposure neither strengthens nor weakens the effect of internationalization on variation in operating perfor-mance. Further analyses show that internationalization is not associated with firm performance.