An Empirical Study on the Relationship between Hedging by Derivatives and Corporate Characteristics for Listed Companies in Taiwan

• Main Authors: Mei-Ya Tseng, 曾媚雅
• Other Authors: Timothy Tingson Wang
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/25083200917621665250

碩士 === 國立東華大學 === 國際企業研究所 === 92 === Accompanying the internationalization and liberalization, firms face more risks in the exposure of exchange rate and interest rate, and therefore have strong incentives to hedge these risks. In order to satisfy firms’ hedging demands, there are many financial derivatives developed as hedging tools in financial markets. This study uses a sample of 1,112 non-financial and insurance public listed companies with full-detail financial data in Taiwan stock market over the period 2000-2002. The main purposes are to know how firms use derivatives, to explore the relationship between hedging by derivatives and corporate characteristics, and to understand the determinants for hedging, hedging purpose, and choosing hedging instrument. Some statistical methods are used including independent-samples t test, Logit regression and Multinomial Logit regression. The following conclusions are obtained in this study: 1.Hedgers and non-hedgers have some different corporate characteristics. Hedgers have more investment tax credits, are larger, have more growth options in their investment opportunity sets, and have higher degree of risk exposures. 2.The important determinants for companies to use financial derivative are influenced significantly by tax preference items, company size, the growth options in opportunity set, degree of risk exposure, and liquidity. 3.The hedgers which hedge for different purposes have distinct corporate characteristics including tax preference items, financial distress, company size, share holding of managers, the degree of information asymmetry, the growth options in opportunity set, and degree of risk exposure. 4.The hedgers who hedge by using different derivatives have distinct corporate characteristics. There is significant distinction between the determinants of the portfolio and the determinants of quantity in choosing hedging instruments.