Does Centralisation of FX Derivative Usage Impact Firm Value?

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Abstract

Previous research has shown that firms identified as derivative users tend to be valued at a premium relative to non-users. In this paper I develop the hypothesis that the derivative premium' is higher in firms with centralised FX exposure management, compared to a decentralised approach in which subsidiaries retain bank contacts and/or decision-making authority. This study benefits from unique survey data on the FX management practices and derivative usage of Swedish listed firms. The data supports the centralisation-hypothesis. Firms with a centralised approach have a statistically significant derivative premium of around 15%, whereas there is no premium for decentralised firms.

Detaljer

Författare
Enheter & grupper
Forskningsområden

Ämnesklassifikation (UKÄ) – OBLIGATORISK

  • Företagsekonomi

Nyckelord

Originalspråkengelska
Sidor (från-till)309-332
TidskriftEuropean Financial Management
Volym21
Utgivningsnummer2
Tidigt onlinedatum2013
StatusPublished - 2015
PublikationskategoriForskning
Peer review utfördJa