A risky affair: Dual class and FX hedging

Nilesh B. Sah, Anandi Banerjee, James Malm and Deepak G. More

Finance Research Letters, 2022, vol. 47, issue PA

Abstract: We highlight the risk management activities of dual class firms by focusing on their use of foreign exchange (FX) derivatives. As opposed to single class firms, dual class firms engage in lower levels of FX hedging activities which may be driven by their long-term orientation and insulation from short-term market pressures. Furthermore, we document that these firms have a stronger reluctance to using futures contracts for FX hedging due to their preference for opacity and hesitancy to divert resources away from their long-term goals. Overall, we underscore the influence of a firm's share structure on its FX hedging decisions.

Keywords: Dual class; Risk management; Foreign exchange hedging (search for similar items in EconPapers)
JEL-codes: F31 G30 G32 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612321005316
Full text for ScienceDirect subscribers only

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:eee:finlet:v:47:y:2022:i:pa:s1544612321005316

DOI: 10.1016/j.frl.2021.102580

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().