This paper shows the important role of government in determining the behavior of firms in emerging markets by focusing on their response to exchange-rate exposure. We measure the foreign exchange-rate exposure of Korean firms and investigate into its determinant factors. Our results show that around 15 percent of the firms have significant exposure and there exists a structural shift of the firms' exposure during our experimental period. In the earlier subperiod, firms tend to have positive exposure while in the later subperiod firms tend to have negative one. Our results also show the significant role of government intervention when Korean firms deal with their exchange-rate exposure. Firms with more government intervention tend to over-invest and care less about their exposure. As a result, firms with more government intervention tend to expose more. Our results also show that chaebol firms usually have lower exposures. It can, at least partly, be attribute to size effect because those firms tend to be large firms. The evidences uncovered in this paper are very different from the existing studies based on developed countries. / Yan Hong-jun. / Adviser: Jia He. / Source: Dissertation Abstracts International, Volume: 62-09, Section: A, page: 3138. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2001. / Includes bibliographical references (p. 56-59). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. Ann Arbor, MI : ProQuest dissertations and theses, [200-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / School code: 1307.