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Granular Corporate Hedging Under Dominant Currency / Laura Alfaro, Mauricio Calani, Liliana Varela.
- Format:
- Book
- Author/Creator:
- Alfaro, Laura.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w28910.
- NBER working paper series no. w28910
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2021.
- Summary:
- This paper shows that, in a world dominated by vehicle currencies, firms engaging in international operations retain currency risk and hedge it real and financially. We employ a unique dataset covering the universe of trade credit, international trade, foreign currency debt, and FX derivatives contracts with firms' census data in Chile (2005-2018). We document that operational hedging is quantitatively limited, as different maturity, frequency, and amount of FX operations make it difficult to net these exposures. The granular firms complement real hedging using FX financial instruments, which improve their cash flow management and promote their trade and growth.
- Notes:
- Print version record
- June 2021.
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