The Determinants of Currency Risk Management in Latin American Nonfinancial Firms

Survey on the Use of Derivatives in Indonesia

“…In other words, based on the results of the Pearson Chi-square and the Fisher's exact tests, there is a strong indication that the use of derivative by large firms is significantly higher than that by small firms. Again, this evidence is in line with the findings provided by Ceuster et al (2000) for the case of Belgium and Schiozer and Saito (2009) in Brazil. The purposes of using derivatives are an interesting fact to be investigated in this study.…”

“…use derivatives than small firms. This also corresponds with the results of previous studies, such as Bodnar et al (1998) in the U.S., Mallin et al (2000) in the U.K., Alkeback and Hagelin (1999) in Sweden, or Schiozer and Saito (2009) …”

“…Many empirical studies have found evidence on the positive association between firm size and the use of derivatives, such as Borokovich et al (2004) in the U.S., Berkman and Bradbury (1996) in New Zealand, Nguyen and Faff (2002), and Brailsford et al (2003) in Australia, Yosano and Lantara (2010) in Japan, and Lantara (2010) in Indonesia. Some other survey studies also support the size effect hypothesis, such as the study by Bodnar et al (1998) in the U.S., Mallin et al (2001) in the U.K., Alkeback and Hagelin (1999) in Sweden, or Schiozer and Saito (2009) …”

“…ings in the developed countries in Asia, such as 60 percent in Japan (Heaney et al 1999) and 37 percent in Hong Kong (Yu et al 2001), or even when compared to the finding in Latin America, such as 57 percent in Brazil (Schiozer and Saito 2009). The relatively low participation rate of the use of derivatives in this study indicates that the development of derivatives market in Indonesia is still in the stage of infancy.…”

“…Some among others used a survey methodology, such as Bodnar et al (1996;1998) in the U.S., Bodnar and Gebhardt (1998) in Germany, Ceuster et al (2000) in Belgium, Mallin et al (2001) in the U.K., Berkman and Bradbury (1996) in New Zealand, Heaney et al (1999) in Japan, and Yu et al (2001) in Hong Kong. However, evidence on the cases of developing countries is very limited, such as Schiozer and Saito (2009) in Brazil. This study contributes to the literature by showing evidence on the practice of risk management with the use of derivatives from other developing countries in Asia, especially Indonesia.…”