"foreign exchange risk management"
229615310
Foreign Exchange Risk Management of Multinational Companies
After the 811 exchange rate reform in China, for one thing, the exchange rate formation mechanism has caused the RMB exchange rate to break through the ten year appreciation against the dollar. For another, RMB began to fluctuate significantly. As a result of this change, Chinese foreign related companies have suffered large exchange losses during this period of time, and their foreign exchange risk management capabilities need to be strengthened urgently. In this paper, the foreign exchange risk management strategies were analyzed through a literature review and case study of the multinational company ABB. Besides, solutions for Chinese multinational companies were provided to deal with foreign exchange risks. To strengthen the management of a company, enhancing the awareness of foreign exchange risks and building a risk management platform are recommended methods.
Yuxin Wang
213924957
Corporate Foreign Exchange Risk Management
Hakan Jankensgard Alf Alviniussen Lars Oxelheim
229102932
Research and Analysis on the current situation of foreign exchange risk management of transnational corporations in China
In line with the principle of implementing the basic national policy of opening to the outside world, in recent years, the construction of China's open economic system has been steadily promoted. With the implementation of the policy of "one belt and one road" more and more enterprises in China begin to go abroad and become multinational corporations. Multinational enterprises will produce a large number of foreign exchange positions in the daily business operation of the company, and will inevitably face foreign exchange risks. The correct and effective management of foreign exchange risk is conducive to enhance the competitiveness of enterprises and enhance the profitability of the company. However, due to the lack of experience in foreign exchange management in China, enterprises cannot well assess and prevent foreign exchange risk and risk loss. This paper expounds the foreign exchange risks of multinational enterprises and the main types of foreign exchange risks, finds out the existing problems through analyzing the current situation of foreign exchange management of multinational enterprises, and puts forward constructive suggestions. It is expected that multinational enterprises can carry out effective foreign exchange risk management to prevent risks, reduce costs and maximize profits.
Xin-rong Liu Lei Wang
169810372
An Analysis of Foreign Exchange Risk Management: Techniques Employed in Indian Pharma Industry
Foreign exchange risk management (FERM) involves using both internal and external techniques such as forwards, futures, options, and swaps that are called as currency derivatives. The firms with greater growth opportunities and tighter financial constraints are more inclined to use currency derivatives. The Forex market provides various derivative instruments to hedge against currency exposures such as currency forwards, options, futures, and swaps. The current article aims at studying various FERM techniques used in the Indian pharmaceutical industry and its impact on exchange gain/losses. For this purpose, foreign exchange cash flows arising out of imports and exports and exchange gain/losses of the companies during 2010 2017 of 10 sample companies chosen from the pharma industry are used. It is observed from the study that only two currencies USD and EUR hold command in the forex market and other currencies are being used minimally. It is also noted that there are several currency derivatives available to the business firms such as forwards, futures, options, and swaps for hedging currency exposure. However, among all these techniques, forward contract is considered to be an effective hedging tool and easier to understand.
Jindal Journal of Business Research
Prakash Basanna K R Pundareeka Vittala
211782394
EFFECTS OF FOREIGN EXCHANGE RISK MANAGEMENT TECHNIQUES ON PROFITABILITY OF LOCAL BASED MULTINATIONAL CORPORATIONS LISTED IN KENYA
The main objective of this study was to establish the effects of the foreign exchange risk management techniques on the profitability of local based Multination Corporations listed in Kenya. The study intended to identify the influence of forward contracts, futures contracts, swaps contracts and options contracts on the firm profitability of local based multinational corporations listed in Kenya. The target population of the study was the risk managers of the local based Multinational Corporations listed in Kenya, which were 32 in number. The study found out that forwards contracts positively and significantly affect the profitability, futures contract also positively and insignificantly affect the profitability, options contracts positively and insignificantly affect the profitability and lastly swaps contract positively and significantly affect the profitability. The study concluded that foreign exchange risk management techniques influence profitability.
Alex Kigen Barsemoi Robert Mugo
145042250
An Investigation of Foreign Exchange Risk Management in Chinese Multinational Companies Compared with US and UK MNEs
This paper investigated foreign exchange risk management of Chinese MNEs compared with US and UK MNEs. Based on the 14 MNEs selected from each country, annual reports are used to collect data. Whether hedging or not, foreign exchange risk measurement, foreign exchange risk management, determinations on hedging, and hedging techniques are the focus in this study. This study finds that USA and UK MNEs are more active in hedging than Chinese MNEs, which is in line with empirical findings. And more Chinese MNEs have not mentioned the way of measuring foreign exchange risk. In addition, compared with US and UK firms, a certain number of largescaled Chinese MNEs have not hedged, which is opposite to most previous research results. Also Chinese firms with relatively lower centralization have lower percentage on hedging in foreign exchange risk, which is in line with empirical studies. On the other hand, the USA, the UK and China are very similar in terms of foreign exchange risk management, goals, and external hedging techniques. Moreover, there is no significant difference in the relationship between the percentage of overseas business and hedging. Finally, this study concludes with the findings and provides important recommendations for further research. Keywords Foreign exchange management; Firm size; Centralization; Hedging techniques
Saier Su
213642244
Determinants of foreign exchange risk management in Latin American firms
The purpose of this paper is to identify whether Latin American (LA) firms are adopting any hedging strategy when designing foreign exchange risk (FXR) measures. To that end, the authors explore the impact of several drivers of FXR management.,The sample consists of 342 non financial listed firms established in a group of representative countries of the LA region and covers the period from 2008 to 2016. Hypothesis testing is performed through a Logit model that measures the likelihood to adopt hedging practices. In addition, a Tobit test offers further insights into the derivatives users.,The authors corroborate capital structure related hypotheses such as tax goals, financial distress, liquidity and growth opportunities. In addition, both ownership concentration and income tax payable seem to be negative and significant determinants of FXR coverage.,Results reported in this study are relevant for the LA region with high tradition in raw materials and commodities exports. The results show that LA firms still make limited use of derivatives and there is still much room for improvement. Hence, additional efforts to promote FXR hedging should be desirable, to meet authorities' recommendations (OECD et al. 2007) Further research exploring corporate governance relationships and differences between large and small firms might be helpful.,Este estudio tiene como objetivo identificar si las empresas Latinoamericanas (LA) estan adoptando alguna estrategia de cobertura frente al riesgo de tipo de cambio (FXR) Para ello exploramos el impacto de varios determinantes de gestion de FXR.,La muestra esta formada por 342 empresas del sector no financiero de un grupo representativo de paises latinoamericanos y abarca el periodo 2008 a 2016. Para testar las hipotesis se aplican modelos Logit que miden la probabilidad de adoptar diferentes practicas de cobertura. Adicionalmente, los resultados de la aplicacion de un modelo Tobit ofrecen informacion extra sobre los usuarios de derivados.,Corroboramos las hipotesis relacionadas con la estructura de capital, tales como objetivos fiscales, dificultades financieras, liquidez y oportunidades de crecimiento. Ademas, tanto la concentracion de propiedad como los impuestos sobre la renta por pagar parecen ser determinantes negativos y significativos de la cobertura de FXR.,Los resultados reportados en este estudio son relevantes para la region Latinoamericana con una gran tradicion en exportaciones de materias primas y productos basicos. Nuestros resultados muestran que las empresas Latinoamericanas utilizan de manera limitada los derivados y todavia hay mucho por mejorar. Por lo tanto, es deseable la promocion de esfuerzos adicionales en cuanto a la cobertura de FXR para cumplir con las recomendaciones de las autoridades (OECD, 2007) Entre otras, serian de gran ayuda las investigaciones adicionales que exploren factores adicionales de Gobierno Corporativo (CG) asi como profundizar en las diferencias entre empresas grandes y pequenas.
Cesar Augusto Giraldo-Prieto Cristina de Fuentes Francisco Sogorb-Mira
199710583
Foreign Exchange Risk Management of Petroleum Industry: Focusing on the Cases of Korean Oil Refinery Firms and Mexican State run Oil Firm
The Korean Academic Association of Business Administration
Soonsung Kim
211769671
Research on Foreign Exchange Risk Management of Cross border Supply Chain Enterprises
L Yao
211759311
The effect of foreign exchange risk management practices on financial performance of private commercial banks in Ethiopia
A thesis submitted in partial fulfillment of the requirement for the degree of Masters of Business Administration in Finance
Tadesse Sirak