Gambling has attracted people since ancient times. This empirical paper surveys and investigates the nature of corporate speculation done by Danish non-financial companies on the currency markets. The empirical results show that such speculation is widespread and that the extent of speculation is positively linked to the size of the company, to the degree of foreign involvement, and to the conservatism of the capital structure. The empirical results also show that if a person (often the founder or his relatives) is the largest shareholder in the company, the extent of speculation is reduced. The results are import in understanding the gap between a widespread corporate practice of speculation and a theoretical and empirical literature that leaves little support for such speculation.
Translated title of the contribution
Currency Speculation in Danish Non-Financial Firms: Cowboys or Suits?
Original language
English
Publication year
2004
Number of pages
30
Publication status
Published - 2004
Event
21st Annual AFFI Conference - Duration: 24 Jun 2004 → 26 Jun 2004