Foreign debt and financial hedging : evidence from Australia

Nguyen, Hoa and Faff, Robert 2006, Foreign debt and financial hedging : evidence from Australia, International review of economics and finance, vol. 15, no. 2, pp. 184-201, doi: 10.1016/j.iref.2004.03.006.

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Title Foreign debt and financial hedging : evidence from Australia
Author(s) Nguyen, HoaORCID iD for Nguyen, Hoa
Faff, Robert
Journal name International review of economics and finance
Volume number 15
Issue number 2
Start page 184
End page 201
Publisher Elsevier Inc.
Place of publication Amsterdam, The Netherlands
Publication date 2006
ISSN 1059-0560
Keyword(s) foreign debt
financial hedging
foreign currency exposure
Summary We investigate the role of foreign currency denominated debt (FCDD) as a natural hedging instrument using a sample of Australian firms. Our results show that the incidence of foreign debt use among industrial sector firms is associated with a lower level of exchange rate exposure. The practice of issuing foreign debt within the industrial sector also conforms better to the hypothesis that firms do so to satisfy a demand for hedging. In contrast, although the incidence of foreign debt issues is higher in the resource/mining sector, the underlying motive for such arises from a demand for financing.

Language eng
DOI 10.1016/j.iref.2004.03.006
Field of Research 150201 Finance
HERDC Research category C1.1 Refereed article in a scholarly journal
Copyright notice ©2004 Elsevier Inc.
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Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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