Exchange Risk Perception and Exchange Risk Management: A Regional Application in Turkey’s Manufacturing Firms

Serdar Ogel, Adem Boyukaslan and Semih Acikgozoglu

A chapter in Contemporary Issues in Business Economics and Finance, 2020, vol. 104, pp 57-84 from Emerald Group Publishing Limited

Abstract: The present study aims to reveal knowledge, report on perception level and look at the evaluation of exchange rate risk management techniques of enterprises registered to Afyonkarahisar Chamber of Commerce and Industry. In order to achieve this, the authors conducted a study that included a field-survey and consisted of 223 enterprises that have foreign trade transactions in Afyonkarahisar city. The data that were used in the analysis had been collected via a survey and they were statistically evaluated by SPSS program. Within the scope of the study, the authors investigated the determination of corporational identity of the sampled manufacturing enterprises, organisational structure of finance departments, determination of ownership structures of these enterprises, determination of foreign exchange risk perceptions, classification of exchange rate risks according to industry type and the determination of risk management instruments such as internal and external hedging strategies and information and usage levels of derivative instruments. The most important result obtained in the study is that the majority of the companies, which operate in a competitive environment, are intensely exposed to foreign exchange risk but try to overcome the foreign exchange risk using traditional internal firm-level hedging methods instead of well-reputed external hedging methods or derivative instruments. Firms declared to be out of knowledge – by any means – for derivative instruments as the main reason for not utilising a well-reputed external foreign exchange risk management techniques.

Keywords: Exchange rate risk; derivative instruments; hedging; currency; risk management; G32; P45 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:csefzz:s1569-375920200000104006

DOI: 10.1108/S1569-375920200000104006

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