Abstract
This paper examines the operational hedging strategies of high technology firms and how they are related to financial hedging. We use a sample of 216 firms, consisting of 108 operationally-hedged high technology firms and a size and industry matched sample of 108 non-operationally-hedged firms. We find that derivatives users are larger and are more R&D intensive than non-derivative users. Our regression analysis results show that operational hedging and financial hedging are complementary. However, firms that use financial hedging are able to significantly lower their exchange rate exposure. Finally, our results show that financial hedging adds value for our sample of high technology firms, while operational hedging does not.
Keywords
Citation
Kim, Y.S. (2013), "Global Diversification and Hedging by High Technology Firms", Journal of Derivatives and Quantitative Studies: 선물연구, Vol. 21 No. 4, pp. 383-409. https://doi.org/10.1108/JDQS-04-2013-B0002
Publisher
:Emerald Publishing Limited
Copyright © 2013 Emerald Publishing Limited
License
This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode