外彙彙率風險規避（pdf 22）

Abstract
Using a sample of Swedish firms we investigate the risk reducing effect of foreign exchange exposure
hedging. Further, we investigate risk reduction from using different hedging instruments, and particular
interest is directed towards the impact of transaction exposure hedges and translation exposure hedges
respectively. We find that firms’ foreign exchange exposure is increasing with the level of inherent exposure,
measured as the difference between revenues and costs denominated in foreign currency, and that it is
decreasing with firm size. We find a significant reduction in foreign exchange exposure from the use of
financial hedges. The evidence suggests that the usage of foreign denominated debt as well as currency
derivatives reduce firms’ foreign exchange exposure. Further, we find that transaction exposure hedges
significantly reduce exposure, and that translation exposure hedges also reduce exposure. A possible
explanation for the latter is that translation exposure approximates the exposed value of future cash flows
from operations in foreign subsidiaries (i.e. economic exposure). If so, by hedging translation exposure,
economic exposure is reduced.
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