Abstract
Empirical research has focused on export as a proxy for exchange rate exposure and the use of foreign exchange derivatives as an instrument to deal with this exposure. This empirical study applies an integrated foreign exchange risk management approach with a particular focus on the role of import in medium-sized manufacturing firms in Denmark (a small, open economy). We find a strong, negative relation between import and the use of foreign exchange derivatives on the aggregate level. Our findings are consistent with the notion that firms use import to match the foreign exchange exposure created by foreign sales activities.
Original language | English |
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Journal | Journal of Multinational Financial Management |
Volume | 20 |
Issue number | 4-5 |
Pages (from-to) | 235-250 |
Number of pages | 16 |
ISSN | 1042-444X |
DOIs | |
Publication status | Published - 2010 |
Keywords
- integrated foreign exchange risk
- management
- import
- medium-sized firms