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Integrated Foreign Exchange Risk Management: The Role of Import in Medium-Sized, Manufacturing Firms

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  • Tom Aabo
  • Esben Høg, Denmark
  • Jochen Kuhn, A.P. Moller - Maersk A/S, Denmark
Empirical research has focused on export as a proxy for exchange rate exposure and the use of foreign exchange derivatives as an instrument to deal with this exposure. This empirical study applies an integrated foreign exchange risk management approach with a particular focus on the role of import in medium-sized manufacturing firms in Denmark (a small, open economy). We find a strong, negative relation between import and the use of foreign exchange derivatives on the aggregate level. Our findings are consistent with the notion that firms use import to match the foreign exchange exposure created by foreign sales activities.

Original languageEnglish
JournalJournal of Multinational Financial Management
Pages (from-to)235-250
Publication statusPublished - 2010

    Research areas

  • Integrated Foreign Exchange Risk Management, Import, Medium-Sized Firms

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