Framework for evaluating foreign exchange exposure management practices of non-financial companies: A managerial approach

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dc.contributor Aalto University en
dc.contributor Aalto-yliopisto fi Luostarinen, Samuli 2011-11-14T11:24:00Z 2011-11-14T11:24:00Z 2011
dc.description.abstract Foreign currencies are an integral part of doing international business. Their role is often accepted as a necessity, while the significance of the risks associated with uncertain future exchange rates is dismissed. Previous studies have shown that actively managing foreign exchange (FX) exposure can be beneficial. Few studies, however, have comprehensively explored how to manage FX exposure. The purpose of this study is to examine the FX exposure management practices of non-financial companies involved in international business and ultimately to evaluate their practices. This study contributes to existing literature by outlining a framework for FX exposure management. Previous studies have been content to conclude FX management practices to vary significantly across companies, but this study asserts that sufficient similarities do exist for identifying common developmental paths. Identifying them enables evaluation and comparison of FX exposure management practices between companies. For managers the study includes a tool for self-evaluation and benchmarking purposes. The empirical part of the study gives an overview of the prevailing FX exposure management practices in Finnish non-financial companies. For the empirical part an online survey was conducted in between December 2010 and January 2011. 1110 Finnish non-financial companies were asked to participate out of which 86 applicable responses were received. This constituted overall a 7,7 % response rate. The results of the survey study showed that company size, quantity of FX exposure and the number of foreign currencies used by a company in its operations have positive relationships with the sophistication of prevailing FX exposure management practices. Still the study found that there are significant variations in managing practices of companies with similar FX exposure profiles. Overall performance evaluation was the most neglected component of FX exposure management. en
dc.format.extent 102
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.title Framework for evaluating foreign exchange exposure management practices of non-financial companies: A managerial approach en
dc.type G2 Pro gradu, diplomityö fi Kauppakorkeakoulu fi School of Economics en
dc.contributor.department Department of Management and International Business en
dc.contributor.department Johtamisen ja kansainvälisen liiketoiminnan laitos fi
dc.subject.keyword currency
dc.subject.keyword foreign exchange
dc.subject.keyword FX
dc.subject.keyword foreign exchange exposure management
dc.subject.keyword foreign exchange risk management
dc.subject.keyword hedging
dc.subject.keyword ulkomaanvaluutta
dc.subject.keyword valuuttahallinto
dc.subject.keyword valuuttariski
dc.subject.keyword valuttasuojaus
dc.identifier.urn URN:NBN:fi:aalto-201111181600
dc.type.dcmitype text en
dc.programme.major International Business en
dc.programme.major Kansainvälinen liiketoiminta fi
dc.type.ontasot Master's thesis en
dc.type.ontasot Pro gradu tutkielma fi
dc.subject.helecon kansainväliset yhtiöt
dc.subject.helecon international companies
dc.subject.helecon valuutta
dc.subject.helecon currency
dc.ethesisid 12556 2011-05-06
dc.location P1 I

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