Exchange rate exposure, hedging, and the use of foreign currency derivatives
George Allayannis,Eli Ofek +1 more
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The authors examined whether firms use foreign currency derivatives for hedging or for speculative purposes, and found evidence that firms use currency derivatives to reduce the exchange-rate exposure of non-financial firms.About:
This article is published in Journal of International Money and Finance.The article was published on 2001-04-01 and is currently open access. It has received 694 citations till now. The article focuses on the topics: Exchange rate & Currency.read more
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The Use of Foreign Currency Derivatives and Firm Market Value
George Allayannis,James Weston +1 more
TL;DR: This paper examined the use of foreign currency derivatives by a sample of 720 large U.S. non-financial firms between 1990 and 1995 and its potential impact on firm value using Tobin's Q as an approximation of a firm's market valuation.
Journal ArticleDOI
The Use of Foreign Currency Derivatives and Firm Market Value
George Allayannis,James Weston +1 more
TL;DR: This paper examined the use of foreign currency derivatives (FCDs) in a sample of 720 large U.S. nonfinancial firms between 1990 and 1995 and its potential impact on firm value using Tobin's Q as a proxy for firm value.
Journal ArticleDOI
Do Firms Hedge in Response to Tax Incentives
John R. Graham,Daniel A. Rogers +1 more
TL;DR: The authors showed that firms hedge to increase debt capacity and interest tax deductions, and to reduce expected tax liability if the tax function is convex, using an explicit measure of tax function convexity.
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Gold as a hedge against the dollar
TL;DR: The extent to which gold has acted as an exchange rate hedge is assessed using weekly data for the last thirty years on the gold price and sterling-dollar and yen-dollar exchange rates.
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How Much Do Firms Hedge With Derivatives
Wayne R. Guay,S.P. Kothari +1 more
TL;DR: In this paper, the authors report the magnitude of their risk exposure hedged by financial derivatives and find that corporate derivatives use appears to be a small piece of non-financial firms' overall risk profile, which suggests a need to rethink past empirical research documenting the importance of firms' derivative use.
References
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Financial ratios, discriminant analysis and the prediction of corporate bankruptcy
TL;DR: In this paper, a set of financial and economic ratios are investigated in a bankruptcy prediction context wherein a multiple discriminant statistical methodology is employed, and the data used in the study are limited to manufacturing corporations, where an initial sample of sixty-six firms is utilized to establish a function which best discriminates between companies in two mutually exclusive groups: bankrupt and nonbankrupt firms.
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The Determinants of Firms' Hedging Policies
Clifford W. Smith,René M. Stulz +1 more
TL;DR: In this article, the authors develop a positive theory of the hedging behavior of value-maximizing corporations, treating hedging by corporations simply as one part of the firm's financing decisions.
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Some statistical models for limited dependent variables with application to the demand for durable goods
TL;DR: This article developed several models for limited dependent variables, which are extensions of the multiple probit analysis model and differ from that model by allowing the determination of the size of the variable when it is not zero to depend on different parameters or variables from those determining the probability of its being zero.
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Risk Management: Coordinating Corporate Investment and Financing Policies
TL;DR: In this paper, a general framework for analyzing corporate risk management policies is developed, and the authors argue that if external sources of finance are more costly to corporations than internally generated funds, there will typically be a benefit to hedging: hedging adds value to the extent that it helps ensure that a corporation has sufficient internal funds available to take advantage of attractive investment opportunities.