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The German Humpback: Internationalization and Foreign Exchange Hedging

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Standard

The German Humpback : Internationalization and Foreign Exchange Hedging. / Aabo, Tom; Ploeen, Rasmus.

In: Journal of Multinational Financial Management, Vol. 27, 2014, p. 114-129.

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaper › Journal article › Research › peer-review

Harvard

Aabo, T & Ploeen, R 2014, 'The German Humpback: Internationalization and Foreign Exchange Hedging', Journal of Multinational Financial Management, vol. 27, pp. 114-129. https://doi.org/10.1016/j.mulfin.2014.05.001

APA

Aabo, T., & Ploeen, R. (2014). The German Humpback: Internationalization and Foreign Exchange Hedging. Journal of Multinational Financial Management, 27, 114-129. https://doi.org/10.1016/j.mulfin.2014.05.001

CBE

Aabo T, Ploeen R. 2014. The German Humpback: Internationalization and Foreign Exchange Hedging. Journal of Multinational Financial Management. 27:114-129. https://doi.org/10.1016/j.mulfin.2014.05.001

MLA

Aabo, Tom and Rasmus Ploeen. "The German Humpback: Internationalization and Foreign Exchange Hedging". Journal of Multinational Financial Management. 2014, 27. 114-129. https://doi.org/10.1016/j.mulfin.2014.05.001

Vancouver

Aabo T, Ploeen R. The German Humpback: Internationalization and Foreign Exchange Hedging. Journal of Multinational Financial Management. 2014;27:114-129. https://doi.org/10.1016/j.mulfin.2014.05.001

Author

Aabo, Tom ; Ploeen, Rasmus. / The German Humpback : Internationalization and Foreign Exchange Hedging. In: Journal of Multinational Financial Management. 2014 ; Vol. 27. pp. 114-129.

Bibtex

@article{edb544c9e8bb4a1cbbe6c2d98f9e8912,
title = "The German Humpback: Internationalization and Foreign Exchange Hedging",
abstract = "Previous studies find a monotonic positive relationship between a firm{\textquoteright}s internationalization and its foreign exchange hedging. We argue that high levels of internationalization can reduce the need for foreign exchange hedging through diversification (e.g. sales to several markets) and operational hedging (matching of cash flows and operational flexibility). We employ multivariate regression analysis and find an inverse U-shape relationship (“humpback”) for large listed non-financial German firms. Foreign exchange hedging activity peaks when half of sales (or long-term assets) is outside Europe. We do not find support that diversification or production facilities abroad drive our results. Our paper is the first empirical paper to document an inverse U-shape relationship between internationalization and foreign exchange hedging.",
keywords = "Operational flexibility, Internationalization, Foreign exchange hedging, Diversification, Cash flow matching",
author = "Tom Aabo and Rasmus Ploeen",
note = "Campus adgang til artiklen / Campus access to the article",
year = "2014",
doi = "10.1016/j.mulfin.2014.05.001",
language = "English",
volume = "27",
pages = "114--129",
journal = "Journal of Multinational Financial Management",
issn = "1042-444X",
publisher = "Elsevier BV",

}

RIS

TY - JOUR

T1 - The German Humpback

T2 - Internationalization and Foreign Exchange Hedging

AU - Aabo, Tom

AU - Ploeen, Rasmus

N1 - Campus adgang til artiklen / Campus access to the article

PY - 2014

Y1 - 2014

N2 - Previous studies find a monotonic positive relationship between a firm’s internationalization and its foreign exchange hedging. We argue that high levels of internationalization can reduce the need for foreign exchange hedging through diversification (e.g. sales to several markets) and operational hedging (matching of cash flows and operational flexibility). We employ multivariate regression analysis and find an inverse U-shape relationship (“humpback”) for large listed non-financial German firms. Foreign exchange hedging activity peaks when half of sales (or long-term assets) is outside Europe. We do not find support that diversification or production facilities abroad drive our results. Our paper is the first empirical paper to document an inverse U-shape relationship between internationalization and foreign exchange hedging.

AB - Previous studies find a monotonic positive relationship between a firm’s internationalization and its foreign exchange hedging. We argue that high levels of internationalization can reduce the need for foreign exchange hedging through diversification (e.g. sales to several markets) and operational hedging (matching of cash flows and operational flexibility). We employ multivariate regression analysis and find an inverse U-shape relationship (“humpback”) for large listed non-financial German firms. Foreign exchange hedging activity peaks when half of sales (or long-term assets) is outside Europe. We do not find support that diversification or production facilities abroad drive our results. Our paper is the first empirical paper to document an inverse U-shape relationship between internationalization and foreign exchange hedging.

KW - Operational flexibility

KW - Internationalization

KW - Foreign exchange hedging

KW - Diversification

KW - Cash flow matching

U2 - 10.1016/j.mulfin.2014.05.001

DO - 10.1016/j.mulfin.2014.05.001

M3 - Journal article

VL - 27

SP - 114

EP - 129

JO - Journal of Multinational Financial Management

JF - Journal of Multinational Financial Management

SN - 1042-444X

ER -