This empirical study of the exchange rate exposure management of Danish non-financial firms listed on the Copenhagen Stock Exchange shows that debt denominated in foreign currency ("foreign debt") is a very important alternative to the use of currency derivatives. The results show that the relative importance of foreign debt is positively related to (1) the extent of foreign subsidiaries, (2) the relative value of assets in place, (3) the size of the firm, and (4) the debt ratio. The pivotal role of time horizon is emphasized. These findings are important to firms in other countries with open economies.
Original language
English
Publication year
2005
Publication status
Published - 2005
Event
European Financial Management Association 2005 Annual Conference - Milan, Italy Duration: 29 Jun 2005 → 2 Jul 2005
Conference
Conference
European Financial Management Association 2005 Annual Conference