Corporate Risk Management: New Empirical Evidence from Foreign Exchange and Interest Rate Risk

Posted: 11 Jun 2019

Date Written: April 2, 2019

Abstract

Contemporary corporate risk management with its diverse facets and categories commonly involves the usage of derivative instruments. Most of the relevant empirical literature originates from commodity risk management, even though the most important risk categories in terms of derivative usage are foreign exchange (FX) and interest rate (IR) risk. Empirical evidence in these areas is rare and often relies on alternative indicators of derivative usage due to a limited availability of adequate data. We close this gap in the literature and introduce two innovative and hand-collected datasets – one for FX and one for IR risk – from the unexplored regulatory environment in France. Based on an unprecedented data granularity with advanced exposure and derivative usage information, we examine the preeminent topics on the relevance and the determinants (together with the identification) of speculative activities in corporate FX and IR risk management.

Keywords: Foreign Exchange Risk; Interest Rate Risk; Corporate Risk Management; Selective Hedging; Speculation; Disclosure

JEL Classification: G11, G32, G38, G39

Suggested Citation

Hecht, Andreas, Corporate Risk Management: New Empirical Evidence from Foreign Exchange and Interest Rate Risk (April 2, 2019). Available at SSRN: https://ssrn.com/abstract=3394235

Andreas Hecht (Contact Author)

University of Hohenheim ( email )

Fruwirthstr. 48
Stuttgart, 70599
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
562
PlumX Metrics