The impact of individual‐owners on currency speculation: the case of Danish non‐financial firms

Tom Aabo

International Journal of Managerial Finance, 2007, vol. 3, issue 1, 92-107

Abstract: Purpose - To investigate the extent to which finance managers in non‐financial firms speculate in the currency markets and particularly to investigate the effect of individual‐owners on such speculation. Design/methodology/approach - This paper uses survey data in order to analyse the extent of currency speculation in non‐financial firms. It uses survey data and publicly available data in an ordered probit regression analysis in order to analyse the decisive factors behind the extent of currency speculation in non‐financial firms. Findings - Currency speculation is widespread among non‐financial firms and takes the form of selective hedging as well as speculation not related to the underlying business. The extent of speculation is positively related to the size of the firm, to the international involvement of the firm, and to the conservatism of its capital structure. If an individual (often the founder or a descendant of the founder) is the largest shareholder in the firm, the extent of such speculation is significantly reduced. Research limitations/implications - The findings are based on Danish, non‐financial firms listed on the Copenhagen Stock Exchange. Originality/value - The contribution of this paper is to provide evidence on the negative relationship between individual‐owners (ownership structure) and the extent of currency speculation in non‐financial firms and more generally to investigate the factors behind such speculation.

Keywords: Currency options; Risk management; Denmark (search for similar items in EconPapers)
Date: 2007
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmfpp:v:3:y:2007:i:1:p:92-107

DOI: 10.1108/17439130710721671

Access Statistics for this article

International Journal of Managerial Finance is currently edited by Dr Alfred Yawson

More articles in International Journal of Managerial Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().