Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/162992
Authors: 
Hecht, Andreas
Year of Publication: 
2017
Series/Report no.: 
Hohenheim Discussion Papers in Business, Economics and Social Sciences 15-2017
Abstract: 
We examine the determinants of corporate speculation and challenge the extant, conflicting evidence. Separating risk management (reducing currency-specific FX exposure) from speculation (increasing or holding currency-specific FX exposure constant), we provide unprecedented evidence that speculators are smaller, have more growth opportunities and possess lower internal resources than risk-managing firms. The refined granularity of our dataset stems from a unique regulatory environment, where a regulating authority recommends additional disclosures for FX risk management in excess of governing accounting standards. Our findings enable investors, henceforth, to identify speculation from public available sources, where our results substantiate the significance of such an extended reporting. Thus, this case of optional disclosures might serve as blueprint for further regulatory refinements in other settings.
Subjects: 
Foreign Exchange
Risk Management
Selective Hedging
Speculation
Disclosure
Reporting
JEL: 
G32
G38
G39
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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