Foreign Currency Hedging and Firm Value: A Dynamic Panel Approach

Magee, Shane

doi:10.2139/ssrn.1361309

Cited by 8 publications

(9 citation statements)

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“…Investors might consider this information as information that is not useful for investors in making investment decisions. The results of this test are also in line with testing using other developing countries such as Magee (2009) and Ayturk et al (2016).…”

Section: Methodssupporting

confidence: 78%

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Do Derivatives Instruments Ownership Decrease Firm Value in Indonesia?

Firmansyah

Purnama²

2020

REAKSI

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This research aims to examine the association between derivatives instruments and firm value. This research is quantitative research with multiple linear regression models and panel data. The sample employed in this research is non-financial companies listed on the Indonesia Stock Exchange (IDX). The type of data used in this study is secondary data sourced from financial statements, stock price information, and annual reports from 2012 to 2017. The sample selection using a purposive sampling method with the number of samples amounted to 246 firm-year. The result of this study suggests that a derivatives instrument is not associated with firm value. Investors in Indonesia do not consider ownership of derivative instruments by companies whether those are harmful of not for the investment impact. Also, derivatives do not have an official market in Indonesia as well as investors also do not understand the purpose of derivative ownership by companies.

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Section: Methodssupporting

confidence: 78%

“…Aretz & Bartram (2010) found that operational hedges and hedges on foreign currency debt have a positive effect on firm value. Magee (2009) reexamined the use of foreign currency derivatives and company value for U.S. nonfinancial companies. The study found that the use of derivatives did not affect firm value.…”

Section: Introductionmentioning

confidence: 99%

Do Derivatives Instruments Ownership Decrease Firm Value in Indonesia?

Firmansyah

Purnama²

2020

REAKSI

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“…Jin and Jorion (2006) use a similar empirical approach to that in Allayannis and Weston (2001) and, contrary to them, find insignificant effects of hedging on Tobin's Q. Other examples include the study by Magee (2009), who concludes that currency hedging has no effect on firm value, and more recently, Bartram, Brown, and Conrad (2011), who study an international sample of nonfinancial firms and find that the market value of derivatives usage is unclear. 14 Our empirical approach extends the existing literature in two ways.…”

Section: The Value Implications Of Cash Flow Hedgingmentioning

confidence: 99%

Cash Flow Hedging and Liquidity Choices

2012

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“…Magee (2009) calls into question the positive statistical relation between FC hedging and value by showing that the positive, significant, statistical relationship between FC hedging and value disappears after controlling for the possibility that past levels of firm value affect current levels of foreign currency hedging.…”

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confidence: 99%

Foreign currency derivative use and shareholder value

Belghitar

Clark

Mefteh

2013

International Review of Financial Analysis

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This paper investigates the effect of foreign currency (FC) derivatives use on shareholder value. Exposures are broken down by currency, by whether the currency is appreciating or depreciating and by whether exposures are symmetric or asymmetric. We find that derivatives are effective in reducing overall FC exposure but there is no evidence of value creation through the application of a program that identifies and targets only loss causing exposures. We also find that FC derivatives use has no significant effect on firm value in the overall sample and when the sample is broken down by exposure type and derivative product.

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Foreign Currency Hedging and Firm Value: A Dynamic Panel Approach

Cited by 8 publications

References 0 publications

Do Derivatives Instruments Ownership Decrease Firm Value in Indonesia?

Do Derivatives Instruments Ownership Decrease Firm Value in Indonesia?

Cash Flow Hedging and Liquidity Choices

Foreign currency derivative use and shareholder value

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