The Impact of Exchange Rate Exposure on Hedging Activities and Performance of Multinational Corporations
| Autor: | Meng-Lin Han, 韓孟霖 |
|---|---|
| Rok vydání: | 2011 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 99 Since floating exchange rate put into practice, most researchers have focused on the relationship between exchange rate exposure and the hedging activities of MNCs. However, many empirical studies discuss whether exchange rate exposure that MNCs faced could be decreased after the hedging activities. From different viewpoint, this paper analyzes the impact of exchange rate exposure on hedging motivation, and considering the performance of MNCs. In this paper, we use a sample of MNCs in U.S. that have foreign sales ratios of at least 10 percent in the sample period to examine (1) Exchange rate exposure and the determinants of exchange rate exposure. (2) The impact of exchange rate exposure on hedging activities of MNCs. (3) Whether exchange rate exposure influences the performance of MNCs or not. (4) After hedging activities, the performance of MNCs. We find evidence that (1) On average, the U.S. corporations are overwhelmingly negatively exposed to exchange rate change. This result indicates that when the U.S. dollars appreciate, MNCs’ stock returns usually decline. Besides, in the determinants of exchange rate exposure, we find that exchange rate exposure is negatively related to the firm size, free cash flow, and dividend yield. (2) When MNCs face more exchange rate exposure, MNCs will raise the behavior of operating hedging activities, but reduce financial hedging activities. (3) When MNCs face more exchange rate exposure, the performance of MNCs will decline. (4) After using financial hedging activities, MNCs could not increase its profitability at all, MNCs also should consider the cost of financial hedging. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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