Corporate commodity exposure: A multi-country longitudinal study

This paper conducts a large-scale multi-country longitudinal study and examines the extent that firms are exposed to commodity price risk in 23 OECD countries. An industry analysis reveals that all industries are significantly exposed to commodity price movements ranging between 8 and 10% except for the energy sector where 38% of firms being significantly exposed. Investigating the determinants of commodity price exposure, we report that firm size is negatively associated with commodity exposure, while the fraction of R&D expenses, leverage, country GDP, and sophistication of the financial derivatives markets are positively related to commodity price exposure.