Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Discussion Papers: Exporters optimal hedging


THE LATEST RESERVE BANK OF NEW ZEALAND DISCUSSION PAPERS

15 October, 2008

The following Discussion Papers have been released on the Reserve Bank's website. The discussion papers are available at http://www.rbnz.govt.nz/research/discusspapers/


DP2008/14

Over the hedge? Exporters optimal and selective hedging choices http://www.rbnz.govt.nz/research/discusspapers/dp08_14.pdf By Richard Fabling and Arthur Grimes (PDF 409KB)

How do exporting firms manage currency exposures? We examine this issue at the firm level using comprehensive data from the prototype Longitudinal Business Database recently developed by Statistics New Zealand. We use these data to test both optimal and selective hedging theories. Optimal hedging theory hypothesises that firms hedging choices depend on the probability and cost of financial distress, underinvestment risks, scale, managerial risk aversion, information asymmetry, governance, ownership structures and tax rules. Recent literature suggests that some firms vary hedging positions relative to their optimal position in a selective attempt to beat the market . We examine whether hedging behaviour is consistent with hypotheses derived from optimal hedging theories, and test whether hedging positions change (possibly sub-optimally) when the NZD/AUD is perceived to be high or low relative to an historical average.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


FIRST Union: Do Shareholders Realise Marsden Point Conversion Could Cost More Than Half A Billion Dollars?

FIRST Union, the union representing workers at Refining NZ, are querying whether shareholders voting on Friday on whether to convert the Marsden Point refinery to an import-only terminal realise the conversion could cost $650-700 million dollars... More>>



Civil Contractors: Massive Rebound In Civil Construction Business Confidence

New Zealand’s civil construction industry is riding a massive rebound in post-pandemic business confidence – but this may be undermined by skills shortages, which continue to be the industry’s number one challenge... More>>



Energy: Feeling Our Way Towards Hydrogen - Tina Schirr

Right now hydrogen is getting a lot of attention. Many countries are focusing on producing hydrogen for fuel, or procuring it, or planning for its future use... More>>





ASB: New Support Finder Tool Helps Connect Customers With Thousands In Government Support

ASB research alongside benefit numbers from the Ministry of Social Development shows an increased number of Kiwis are struggling financially, and many may not be aware they’re eligible for government support... More>>


Housing: New Home Consents Continue To Break Records

A record 44,299 new homes were consented in the year ended June 2021, Stats NZ said today. “The annual number of new homes consented rose again in the June 2021 year, the fourth consecutive month of rises,” construction statistics manager Michael Heslop said... More>>


Real Estate: June Home Transfers Remain High
There were 44,517 home transfers in the June 2021 quarter, the highest June quarter figure since 2016, Stats NZ said today. The number of home transfers was very similar to the March 2021 quarter and was up 18,252 from the June 2020 quarter... More>>