Abstract

http://ssrn.com/abstract=1296392
 
 

Citations (137)



 


 



Exchange Rate Exposure, Hedging, and the Use of Foreign Currency Derivatives


George Allayannis


University of Virginia - Darden School of Business

Eli Ofek


New York University (NYU) - Department of Finance

July 1997

NYU Working Paper No. FIN-98-002

Abstract:     
We examine whether firms use foreign currency derivatives for hedging or for speculative purposes. Using the sample of all S&P 500 nonfinancial firms for 1993, we find strong evidence that firms use foreign currency derivatives for hedging; the use of derivatives significantly reduces the exchange-rate risk firms face. We also find that the decision to use derivatives depends on exposure factors (i.e. foreign sales and foreign trade) and on variables largely associated with theories of optimal hedging (i.e., size and R&D expenditures), and that the level of derivatives used depends only on a firm's exposure through foreign sales and trade.

Number of Pages in PDF File: 40

Keywords: Risk management, Multinationals, Corporate policies, Foreign trade

working papers series


Download This Paper

Date posted: November 7, 2008  

Suggested Citation

Allayannis, George and Ofek, Eli, Exchange Rate Exposure, Hedging, and the Use of Foreign Currency Derivatives (July 1997). NYU Working Paper No. FIN-98-002. Available at SSRN: http://ssrn.com/abstract=1296392

Contact Information

George Allayannis (Contact Author)
University of Virginia - Darden School of Business ( email )
Box 6550
Charlottesville, VA 22906-6550
United States
434-924-3434 (Phone)
HOME PAGE: http://faculty.darden.edu/allayannisy
Eli Ofek
New York University (NYU) - Department of Finance ( email )
Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States
Feedback to SSRN


Paper statistics
Abstract Views: 7,572
Downloads: 2,170
Download Rank: 2,976
Citations:  137

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.422 seconds