The exchange rate exposure of UK non-financial companies

Purpose – The purpose of this paper is to investigate the exchange rate exposure of UK nonfinancial companies from January 1981 to December 2001. Design/methodology/approach – The study employs different exchange rate measures and adopts an equally weighted exchange rate. The analyses are conducted at the firm level. All analyses are conducted by regressing the firm’s exchange rate exposure coefficients on its size, foreign activity variables and financial hedging proxies over the whole sample period. Findings – The findings show that a higher percentage of UK non-financial companies are exposed to exchange rate changes than those reported in previous studies. Generally, the results provide a stronger support for the suggested equally weighted rate as an economic variable, which affects firms’ stock returns. The results also show a high proportion of positive exposure coefficients among firms with significant exchange rate exposure, indicating a higher proportion of firms benefiting from an appreciation of the pound. Finally, the results also indicate evidence that firms’ foreign operations and hedging variables affect their sensitivity to exchange rate exposure. Practical implications – This study provides important implications for public policymakers who wish to understand links between policies that affect exchange rates and relative wealth effects. Originality/value – The empirical results of this study should help investors to examine how common stock returns react to exchange rate fluctuations when making financial decisions, and prove useful for financial managers when measuring exposure to foreign exchange rate changes.

Development and evaluation of a non-destructive adhesion test

The object of this work was to further develop the idea introduced by Muaddi et al (1981) which enables some of the disadvantages of earlier destructive adhesion test methods to be overcome. The test is non-destructive in nature but it does need to be calibrated against a destructive method. Adhesion is determined by measuring the effect of plating on internal friction. This is achieved by determining the damping of vibrations of a resonating specimen before and after plating. The level of adhesion was considered by the above authors to influence the degree of damping. In the major portion of the research work the electrodeposited metal was Watt's nickel, which is ductile in nature and is therefore suitable for peel adhesion testing. The base metals chosen were aluminium alloys S1C and HE9 as it is relatively easy to produce varying levels of adhesion between the substrate and electrodeposited coating by choosing the appropriate process sequence. S1C alloy is the commercially pure aluminium and was used to produce good adhesion. HE9 aluminium alloy is a more difficult to plate alloy and was chosen to produce poorer adhesion. The "Modal Testing" method used for studying vibrations was investigated as a possible means of evaluating adhesion but was not successful and so research was concentrated on the "Q" meter. The method based on the use of a "Q" meter involves the principle of exciting vibrations in a sample, interrupting the driving signal and counting the number of oscillations of the freely decaying vibrations between two known preselected amplitudes of oscillations. It was not possible to reconstruct a working instrument using Muaddi's thesis (1982) as it had either a serious error or the information was incomplete. Hence a modified "Q" meter had to be designed and constructed but it was then difficult to resonate non-magnetic materials, such as aluminium, therefore, a comparison before and after plating could not be made. A new "Q" meter was then developed based on an Impulse Technique. A regulated miniature hammer was used to excite the test piece at the fundamental mode instead of an electronic hammer and test pieces were supported at the two predetermined nodal points using nylon threads. This instrument developed was not very successful at detecting changes due to good and poor pretreatments given before plating, however, it was more sensitive to changes at the surface such as room temperature oxidation. Statistical analysis of test results from untreated aluminium alloys show that the instrument is not always consistent, the variation was even bigger when readings were taken on different days. Although aluminium is said to form protective oxides at room temperature there was evidence that the aluminium surface changes continuously due to film formation, growth and breakdown. Nickel plated and zinc alloy immersion coated samples also showed variation in Q with time. In order to prove that the variations in Q were mainly due to surface oxidation, aluminium samples were lacquered and anodised Such treatments enveloped the active surfaces reacting with the environment and the Q variation with time was almost eliminated especially after hard anodising. This instrument detected major differences between different untreated aluminium substrates.Also Q values decreased progressively as coating thicknesses were increased. This instrument was also able to detect changes in Q due to heat-treatment of aluminium alloys.

Formulation of topical non-steroidal anti-inflammatory agents

Reversed-pahse high-performance liquid chromatographic (HPLC) methods were developed for the assay of indomethacin, its decomposition products, ibuprofen and its (tetrahydro-2-furanyl)methyl-, (tetrahydro-2-(2H)pyranyl)methyl- and cyclohexylmethyl esters. The development and application of these HPLC systems were studied. A number of physico-chemical parameters that affect percutaneous absorption were investigated. The pKa values of indomethacin and ibuprofen were determined using the solubility method. Potentiometric titration and the Taft equation were also used for ibuprofen. The incorporation of ethanol or propylene glycol in the solvent resulted in an improvement in the aqueous solubility of these compounds. The partition coefficients were evaluated in order to establish the affinity of these drugs towards the stratum corneum. The stability of indomethacin and of ibuprofen esters were investigated and the effect of temperature and pH on the decomposition rates were studied. The effect of cetyltrimethylammonium bromide on the alkaline degradation of indomethacin was also followed. In the presence of alcohol, indomethacin alcoholysis was observed and the kinetics of decomposition were subjected to non-linear regression analysis and the rate constants for the various pathways were quantified. The non-isothermal, sufactant non-isoconcentration and non-isopH degradation of indomethacin were investigated. The analysis of the data was undertaken using NONISO, a BASIC computer program. The degradation profiles obtained from both non-iso and iso-kinetic studies show that there is close concordance in the results. The metabolic biotransformation of ibuprofen esters was followed using esterases from hog liver and rat skin homogenates. The results showed that the esters were very labile under these conditions. The presence of propylene glycol affected the rates of enzymic hydrolysis of the ester. The hydrolysis is modelled using an equation involving the dielectric constant of the medium. The percutaneous absorption of indomethacin and of ibuprofen and its esters was followed from solutions using an in vitro excised human skin model. The absorption profiles followed first order kinetics. The diffusion process was related to their solubility and to the human skin/solvent partition coefficient. The percutaneous absorption of two ibuprofen esters from suspensions in 20% propylene glycol-water were also followed through rat skin with only ibuprofen being detected in the receiver phase. The sensitivity of ibuprofen esters to enzymic hydrolysis compared to the chemical hydrolysis may prove valuable in the formulation of topical delivery systems.

The exchange rate exposure of UK non-financial companies

Purpose – The purpose of this paper is to investigate the exchange rate exposure of UK nonfinancial companies from January 1981 to December 2001. Design/methodology/approach – The study employs different exchange rate measures and adopts an equally weighted exchange rate. The analyses are conducted at the firm level. All analyses are conducted by regressing the firm’s exchange rate exposure coefficients on its size, foreign activity variables and financial hedging proxies over the whole sample period. Findings – The findings show that a higher percentage of UK non-financial companies are exposed to exchange rate changes than those reported in previous studies. Generally, the results provide a stronger support for the suggested equally weighted rate as an economic variable, which affects firms’ stock returns. The results also show a high proportion of positive exposure coefficients among firms with significant exchange rate exposure, indicating a higher proportion of firms benefiting from an appreciation of the pound. Finally, the results also indicate evidence that firms’ foreign operations and hedging variables affect their sensitivity to exchange rate exposure. Practical implications – This study provides important implications for public policymakers who wish to understand links between policies that affect exchange rates and relative wealth effects. Originality/value – The empirical results of this study should help investors to examine how common stock returns react to exchange rate fluctuations when making financial decisions, and prove useful for financial managers when measuring exposure to foreign exchange rate changes.