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Foreign-Exchange-Risk Management in German Non-Financial Corporations: An Empirical Analysis

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Risk Management

Abstract

The paper reports the results of an empirical study into the foreign-exchange-risk management of large German non-financial corporations. The firms’ managers were asked about the measurement of exchange risk, about their management strategies, and about organizational issues. The majority of the firms are concerned about managing transaction exposure. Most firms adopted a selective hedging strategy based on exchange-rate forecasts. Only a small minority of firms do not hedge foreign-exchange risk at all, and only few companies hedge their transaction exposure completely. The survey found a number of discrepancies between the positions of the academic literature and corporate practice. The most interesting finding, however, is the widespread use of exchange-rate forecasts and of exchange-risk management strategies based on forecasts (selective hedging).

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Authors and Affiliations

  1. Chair for International Management and Communication, Justus-Liebig University Giessen, D-35394, Giessen, Germany

    Martin Glaum

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  1. Martin Glaum
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Editors and Affiliations

  1. Otto Beisheim Graduate School of Management, WHU, Burgplatz 2, D-56179, Vallendar, Germany

    Michael Frenkel  & Markus Rudolf  & 

  2. SchloĂź Reichartshausen, European Business School, D-65375, Oestrich-Winkel, Germany

    Ulrich Hommel

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Glaum, M. (2000). Foreign-Exchange-Risk Management in German Non-Financial Corporations: An Empirical Analysis. In: Frenkel, M., Hommel, U., Rudolf, M. (eds) Risk Management. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-04008-9_21

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  • DOI: https://doi.org/10.1007/978-3-662-04008-9_21

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-662-04010-2

  • Online ISBN: 978-3-662-04008-9

  • eBook Packages: Springer Book Archive

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