Hedging Strategy and the Characteristics of Corporate

• Main Authors: Fu-Jung, Su, 蘇芙蓉
• Other Authors: Ph. D. Yuh-Yeh, Pan
• Format: Others
• Language: zh-TW
• Published: 2001
• Online Access: http://ndltd.ncl.edu.tw/handle/29267074181809427572

碩士 === 淡江大學 === 管理科學學系 === 89 === Because capital have moved quickly and global financial markets were closer and closer recently. Asian Crisis in 1997 and Taiwan financial distress in 1998 depreciated and stock price declined, then profit of corporate decreased. In order to decreasing fluctuation of corporate value, they pay attention to risk management and use derivative financial instruments to hedge. Since derivative financial instruments are high-leverage and fairly risky, incorrect using could cause hung losses or distress. The internal control system for derivatives is very important when companies hedge by them. By using a sample of 207 non-financial and insurance public corporate with internal control data in Taiwan stock exchange to address the relationship between hedging strategy and characteristics of corporate, to know the determinants of internal control and hedging instrument by choosing. Next, we will compare the results from 1997 to 1999. The conclusions of this study are following： 1.We find that sales and report ratio affected corporate hedging strategy, but expected tax and diversification don’t influence corporate hedging strategy. With internal control system being emphasized, the more and more perfect of internal control system, corporate are more intensive to hedge. The results of other variables differ from 1997 to 1999. 2.The determinants of companies using derivative financial instruments are affected significantly by expected tax, financial distress, agency cost of equity and debt, risk exposure, company size, degree of internationalization, group enterprises, industry and internal control system. 3.Having perfect internal control systems are more likely to be group enterprises or high-technical industry and to hedge. Besides, they are of large asset, sales, export ratio, market-to-book ratio, income volume, and lower level diversification and long-term debt ratio. 4.The characteristics of used forward corporate are more likely to have tax preference, high level diversification, better internal control system, and they are of large size, agency cost of debt, smaller manager shares.