Capital structure and financial risk
Subtitle: evidence from foreign debt use in East Asia
By: George Allayannis, Gregory W. Brown, Leora F. Klapper.
Contributors: Brown, Gregory W.; Klapper, Leora.; World Bank. Development Research Group. Finance.
Series: Policy research working paper ;; 2606; Policy research working papers (Online) ;; 2606.
Publisher: World Bank, Development Research Group, Finance
Published: 2001
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Subjects: Foreign exchange -- East Asia.; Risk management -- East Asia.; Derivative securities -- East Asia.; Debts, External -- East Asia.; Hedging (Finance)
Other titles: Exchange rate risk management.
Description: In a large sample of East Asian nonfinancial corporations, firms using foreign currency derivatives had distinctive characteristics, such as larger size and foreign debt exposures. Unlike in studies of U.S. firms, there was only weak evidence that liquidity-constrained firms with greater growth opportunities hedged more. Firms appeared to use foreign earnings as a substitute for hedging with derivatives, and to engage in "selective" hedging. There was no evidence that East Asian firms eliminated their foreign exchange exposure by using derivatives. And firms using derivatives before the crisis performed just as poorly as nonhedgers during the crisis.
Notes: Includes bibliographical references (p. 30-32).
Title from title screen as viewed on Sept. 12, 2002.
"May 2001"--Cover.
Also available in print under title Exchange rate risk management.
Mode of access: World Wide Web.