The Value-Relevance of Foreign Currency Derivatives Disclosures

2008 ◽  
Author(s):  
Aline Muller ◽  
Willem F. C. Verschoor
Keyword(s):  
Foreign Currency ◽  
Value Relevance ◽  
Currency Derivatives

The Study of Value Relevance of on Foreign Currency Transaction

2017 ◽  
Vol 35 (1) ◽  
pp. 97-120
Author(s):  
Seong Il Jeon ◽  
Ki Se Lee
Keyword(s):  
Foreign Currency ◽  
Value Relevance

Asymmetric Information and Corporate Risk Management by Using Foreign Currency Derivatives

2012 ◽  
Vol 15 (01) ◽  
pp. 1250004 ◽  
Author(s):  
Bingxuan Lin ◽  
Chen-Miao Lin
Keyword(s):  
Risk Management ◽  
Asymmetric Information ◽  
Information Asymmetry ◽  
Foreign Currency ◽  
Corporate Risk Management ◽  
Currency Derivatives ◽  
Medium Level ◽  
Low Levels ◽  
Corporate Risk ◽  
Very High

We examine how information asymmetry affects a firm's incentive to hedge versus speculate by using foreign currency derivatives. We find a quadratic relation between asymmetric information and a firm's risk management activities. In particular, we find that the firms facing medium level of information asymmetry are more likely to hedge, while firms with very high and low levels of asymmetric information tend to speculate. Moreover, we find that our results hold primary for firms operating in highly competitive industries.

Foreign Currency Derivatives and Foreign Exchange Rate Exposure Management of KOSDAQ Firms

2013 ◽  
Vol 21 (2) ◽  
pp. 223-254
Author(s):  
Taek Ho Kwon
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Currency ◽  
Foreign Exchange Rate ◽  
Sufficient Evidence ◽  
Similar Data ◽  
Test Results ◽  
Crisis Period ◽  
Exchange Rate Exposure ◽  
Currency Derivatives

This study examines the foreign currency derivatives trading of KOSDAQ firms and analyses the relations of derivatives trading and foreign exchange rate exposure in the period 2005~2010. The amount of derivatives trading reaches 27.7% of total assets for the trading firms before global financial crisis period (2005~2007). While, the amount decreases to 17.6% of total assets during the crisis period (2008~2010). These amounts are much greater than those of KOSPI firms which are calculated using similar data specification and periods. The variables which are usually adopted as determinants of derivatives trading do not explain the usage of derivatives in the analysis of period 2005~2007. These results suggest that KOSDAQ firms use derivatives not only foreign exchange risk managements but also trading purposes during this period. Test results do not show sufficient evidence that KOSDAQ firms use derivatives trading in an effective manner to manage foreign exchange rate exposure. In sum, test results suggest that to achieve the goal of managing foreign exchange rate exposure firms should estimate their open position in foreign currency properly before conducting foreign currency derivatives trading.

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