Foreign-Exchange-Risk Management in German Non-Financial Corporations: An Empirical Analysis

Martin Glaum
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Martin Glaum: University Giessen

A chapter in Risk Management, 2005, pp 537-556 from Springer

Abstract: Abstract The paper reports the results of an empirical study into the foreign-exchange-risk management of large German non-financial corporations. The firms’ managers were asked about the measurement of exchange risk, about their management strategies, and about organizational issues. The majority of the firms are concerned about managing transaction exposure. Most firms adopted a selective hedging strategy based on exchange-rate forecasts. Only a small minority of firms does not hedge foreign-exchange risk at all, and only few companies hedge their transaction exposure completely. The survey found a number of discrepancies between the positions of the academic literature and corporate practice. The most interesting finding, however, is the widespread use of exchange-rate forecasts and of exchange-risk management strategies based on forecasts (selective hedging).

Keywords: Foreign Exchange Risk; Risk Management; Hedging; Derivatives (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-26993-9_27

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DOI: 10.1007/3-540-26993-2_27

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