TY - JOUR
T1 - Exchange Rate Risk and Corporate Hedging
T2 - Evidence from Turkey
AU - Buyukkara, Goknur
AU - Baha Karan, Mehmet
AU - Temiz, Huseyin
AU - Yildiz, Yilmaz
PY - 2019/6/21
Y1 - 2019/6/21
N2 - The aim of this study is to investigate the effect of exchange rate risk on corporate hedging in Turkey. Our panel logit analysis for the period 2009–2015 favors the financial distress hypothesis of hedging rather than the agency cost or investment opportunities hypotheses. The US dollar exchange rate affects the likelihood of currency risk hedging more than the conventional firm-specific determinants of corporate hedging especially after the Fed tapering period. Our findings reveal that, as the dollar exchange rate rises, firms increase their hedging activity since they carry considerable amount of debt in dollars, particularly aftermath of the global financial crisis.
AB - The aim of this study is to investigate the effect of exchange rate risk on corporate hedging in Turkey. Our panel logit analysis for the period 2009–2015 favors the financial distress hypothesis of hedging rather than the agency cost or investment opportunities hypotheses. The US dollar exchange rate affects the likelihood of currency risk hedging more than the conventional firm-specific determinants of corporate hedging especially after the Fed tapering period. Our findings reveal that, as the dollar exchange rate rises, firms increase their hedging activity since they carry considerable amount of debt in dollars, particularly aftermath of the global financial crisis.
KW - dollar exchange rate
KW - exchange rate risk
KW - hedging
KW - panel logit
UR - https://www.scopus.com/pages/publications/85054524599
U2 - 10.1080/1540496X.2018.1490262
DO - 10.1080/1540496X.2018.1490262
M3 - Article
AN - SCOPUS:85054524599
SN - 1540-496X
VL - 55
SP - 1737
EP - 1753
JO - Emerging Markets Finance and Trade
JF - Emerging Markets Finance and Trade
IS - 8
ER -
