Bartram, Söhnke M., Burns, Natasha and Helwege, Jean (2013) Foreign currency exposure and hedging : evidence from foreign acquisitions. Quarterly Journal of Finance, 3 (2). pp. 1-20. 1350010. doi:10.1142/S2010139213500109 ISSN 2010-1392 .

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Abstract

We study the exchange rate exposures of a sample of firms that undertake large acquisitions of foreign companies. Using data from Securities and Exchange Commission (SEC) filings on their foreign operations and derivatives usage, we examine how the exposures change from before to after the acquisition. We find that these deals generally lead to reduced currency exposure, which reflects the fact that most of the firms already have business in the target's country and the mergers serve as operational hedges. In contrast, we do not find a statistically significant effect for hedging with currency derivatives despite the fact that many of the firms in the sample use such instruments.

Item Type:	Journal Article
Divisions:	Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	Quarterly Journal of Finance
Publisher:	World Scientific
ISSN:	2010-1392
Official Date:	28 November 2013
Dates:	Date Event 28 November 2013 Published
Volume:	3
Number:	2
Page Range:	pp. 1-20
Article Number:	1350010
DOI:	10.1142/S2010139213500109
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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