Empirical evidence concerning incentives to hedge transaction and translation exposures

Journal of Multinational Financial Management

Volumn 16, Issue 2, 2006, Pages 142-159

  Hagelin, Niclas ^a   Pramborg, Bengt ^a  

^a STOCKHOLM UNIVERSITY   (Sweden)

Author keywords

Bond covenants; Foreign exchange exposure; Hedging; Loan covenants; Translation exposure

Indexed keywords

EID: 33644807124     PISSN: 1042444X     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.mulfin.2005.05.003     Document Type: Article

References (46)

1. R. Aggarwal Management of accounting exposure to currency changes: Role and evidence of agency costs Managerial Finance 17 1991 10-22
2. P. Alkebäck N. Hagelin Derivative usage by nonfinancial firms in Sweden with an international comparison Journal of International Financial Management and Accounting 10 1999 105-120
3. Alkebäck, P., Hagelin, N., Pramborg, B., 2006. Derivatives usage by non-financial firms in Sweden 1996 and 2003: What has changed? Managerial Finance, in press.
4. G. Allayannis E. Ofek Exchange rate exposure, hedging, and the use of currency derivatives Journal of International Money and Finance 20 2001 273-296
5. G. Allayannis J. Ihrig J.P. Weston Exchange-rate hedging: Financial vs. operational strategies American Economic Review Papers and Proceedings 91 2003 391-395
6. Bartram, S., Brown, G., Fehle, F., 2004. International evidence on financial derivatives use. Working Paper, Lancaster University, University of North Carolina, and University of South Carolina.
7. H. Berkman M.E. Bradbury Empirical evidence on the corporate use of derivatives Financial Management 25 1996 5-13
8. H. Berkman M.E. Bradbury S. Magan An international comparison of derivatives use Financial Management 26 1997 69-73
9. H. Bessembinder Forward contracts and firm value: Investment incentive and contracting effects Journal of Financial and Quantitative Analysis 26 1991 519-532
10. G.M. Bodnar G. Gebhardt Derivatives usage in risk management by US and German non-financial firms: A comparative study Journal of International Financial Management and Accounting 10 1999 153-187
11. G.M. Bodnar G.S. Hayt R.C. Marston 1995 Wharton survey of derivatives usage by US non-financial firms Financial Management 25 1996 113-133
12. G.M. Bodnar G.S. Hayt R.C. Marston 1998 Survey of financial risk management by US non-financial firms Financial Management 27 1998 70-91
13. G.M. Bodnar A. de Jong V. Macrae The impact of institutional differences on derivatives usage: A comparative study of US and Dutch firms European Financial Management 9 2003 271-297
14. G.W. Brown Managing foreign exchange risk with derivatives Journal of Financial Economics 60 2001 401-448
15. Butler, K.C., 2004. Multinational Finance, third ed. South-Western, Mason, Ohio.
16. E.H. Chow W.Y. Lee M.E. Solt The economic exposure of US multinational firms Journal of Financial Research 20 1997 191-210
17. J.E. Core C.M. Schrand The effect of accounting-based debt covenants on equity valuation Journal of Accounting and Economics 27 1999 1-34
18. M.J.K. De Ceuster E. Durinck E. Laveren J. Lodewyckx A survey into the use of derivatives by large non-financial firms operating in Belgium European Financial Management 6 2000 301-318
19. W. Dolde Hedging, leverage, and primitive risk Journal of Financial Engineering 4 1995 187-216
20. D.K. Eiteman A.I. Stonehill M.H. Moffett Multinational Business Finance ninth ed. 2001 Addison-Wesley Boston, MA
21. K.A. Froot D.S. Scharfstein J.C. Stein Risk management: Coordinating corporate investment and financing policies Journal of Finance 48 1993 1629-1658
22. G.D. Gay J. Nam The underinvestment problem and corporate derivatives use Financial Management 27 1998 53-69
23. C. Géczy B.A. Minton C. Schrand Why firms use currency derivatives Journal of Finance 52 1997 1323-1354
24. Graham, J.R., Rogers, D.A., 2000. Does corporate hedging increase firm value? An empirical analysis. Working Paper, Fuqua School of Business, Duke University, Durham, NC.
25. J.R. Graham D.A. Rogers Do firms hedge in response to tax incentives? Journal of Finance 57 2002 815-839
26. W.R. Guay The impact of derivatives on firm risk: An empirical examination of new derivative users Journal of Accounting and Economics 26 1999 319-351
27. N. Hagelin Why firms hedge with currency derivatives: An examination of transaction and translation exposure Applied Financial Economics 13 2003 55-69
28. N. Hagelin B. Pramborg Hedging foreign exchange exposure: Risk reduction from transaction and translation hedging Journal of International Financial Management and Accounting 15 2004 1-20
29. A. Hakkarainen N. Joseph E. Kasanen V. Puttonen The foreign exchange exposure management practices of Finnish industrial firms Journal of International Financial Management and Accounting 9 1998 34-57
30. G.D. Haushalter Financing policy, basis risk, and corporate hedging: evidence from oil and gas producers Journal of Finance 55 2000 107-152
31. J.D. Knopf J. Nam J.H. Thornton The volatility and price sensitivities of managerial stock option portfolios and corporate hedging Journal of Finance 57 2002 801-813
32. Lel, U., 2004. Currency risk management, corporate governance, and financial market development. Working Paper, Indiana University, Bloomington, IN.
33. H.E. Leland Corporate debt value, bond covenants, and optimal capital structure Journal of Finance 49 1994 1213-1252
34. C. Mallin K. Ow-Yong M. Reynolds Derivatives usage in UK non-financial listed companies European Journal of Finance 2001 63-91
35. R.C. Marston The effects of industry structure on economic exposure Journal of International Money and Finance 20 2001 149-164
36. A.D. Martin J. Madura A. Akhigbe A note on accounting exposure and the value of multinational corporations Global Finance Journal 9 1998 267-277
37. A.D. Martin J. Madura A. Akhigbe Economic exchange rate exposure of US-based MNCs operating in Europe The Financial Review 34 1999 21-36
38. A.D. Martin L.J. Mauer Scale economies in hedging foreign exchange cash flow exposures Global Finance Journal 15 2004 17-27
39. S.L. Mian Evidence on corporate hedging policy Journal of Financial and Quantitative Analysis 31 1996 419-439
40. D.R. Nance C.W. Smith C.W. Smithson On the determinants of corporate hedging Journal of Finance 48 1993 267-284
41. B. Pramborg Foreign exchange risk management by Swedish and Korean non-financial firms: A comparative survey Pacific Basin Finance Journal 13 2005 343-366
42. G.S. Roberts J.A. Viscione The impact of seniority and security covenants on bond yields: A note Journal of Finance 39 1984 1597-1602
43. D.J. Skinner Are disclosures about bank derivatives and employee stock options 'value relevant'? Journal of Accounting and Economics 22 1996 393-405
44. C.W. Smith R.M. Stulz The determinants of firms' hedging policies Journal of Financial and Quantitative Analysis 20 1985 391-405
45. C.W. Smith J. Warner On financial contracting: An analysis of bond covenants Journal of Financial Economics 7 1979 117-161
46. P. Tufano Who manages risk? An empirical examination of risk management practices in the gold mining industry Journal of Finance 51 1996 1097-1137