The Effects of Financial versus Operational Hedging Strategies on the Foreign Exchange Exposure and the Value of the Multinationals

• Main Authors: Ming-Yan Li, 李明嫣
• Other Authors: Ming-Chin Lin
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/56365839464943105183

碩士 === 朝陽科技大學 === 財務金融系碩士班 === 98 === Because exchange rate affects both the competitiveness and performances of the corporations, the fluctuation of exchange rate has been a major source of risk for multinationals. This study examines the foreign exchange exposures and hedging strategies of multinational companies listed in Taiwan from 2006 to 2008. We examine the effects of changes in market return and exchange rate on the stock returns. The result shows that the foreign exchange exposures are significantly negative for the multination companies listed in Taiwan. Besides, we find that the determinants of foreign exchange exposures include foreign sales ratio, firm size, total asset turnover ratio, and price to EPS ratio. Furthermore, the empirical results show that using of financial strategy alone can significantly affect foreign exchange exposure of multinational companies, but operational strategy alone can not. However, simultaneously using of financial and operational strategies have a significant effects on foreign exchange exposures and the firm values.