Abstract
Use of hedging and firm value (and performance) nexus has received mixed attention due to conflicting results that broadly consider firms from the U.S. and European contexts. This study investigates data from Asia-Pacific region to observe the interaction between the use of derivatives, value, and performance of non-financial firms. Results indicate hedging to be value enhancing irrespective of the three types of risks hedged: foreign currency, interest rate, and commodity price risk, having foreign currency risk as the strongest driver. This nexus, however, is weaker for commodity price risk. Several moderation and robustness tests also confirm that profitable, highly levered, and high growth companies use derivatives for hedging to a larger extent. We forward that both reactive and proactive approaches to hedging can be explained with respect to corporate intention to reduce reputation risk.
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Article Details
- Year: 2025
- Volume: 46
- Issue: 1
- Pages: 55 - 100
- Accepted: 14.03.2025
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DOI:
https://doi.org/10.5281/zenodo.16874879 -
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How to Cite?
M. Kabir Hassan, Islam Abdeljawad, Mamunur Rashid, Siti Nur Khoirunnisaa (2025). Nexus Between Financial Hedging, Performance and Firm Value: Evidence From A Sample of Non-Financial Asian Firms. Journal of Economic Cooperation and Development, 46(1), 55-100. https://doi.org/10.5281/zenodo.16874879
