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Exchange Rate Exposure Management: The Benchmarking Process of Industrial Companies

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Based on a cross-case study of Danish industrial companies the paper analyzes the benchmarking of the optimal hedging strategy. A stock market approach is pursued but a serious question mark is put on the validity of the obtained information seen from a corporate value-adding point of view. The conducted interviews show that empirical reasons behind actual hedging strategies vary considerably - some in accordance with mainstream finance theory, some resting on asymmetric information. The diversity of attitudes seems to be partly a result of different competitive environments, partly a result of practices and strategies that have been established in each company fairly independently over time. The paper argues that hedge benchmarks are useful in their creation process (by forcing a comprehensive analysis) as well as in their final status (by the establishment of a consistent hedging strategy and objective performance criteria).
Original languageEnglish
Publication year2000
Publication statusPublished - 2000
EventThe 7th Global Finance Conference, Chicago, USA -
Duration: 19 Apr 200022 Apr 2000

Conference

ConferenceThe 7th Global Finance Conference, Chicago, USA
Period19/04/200022/04/2000

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ID: 32330315