AN INTEGRATED MODEL OF MULTINATIONAL FLEXIBILITY AND FINANCIAL HEDGING

• 成果类型: Article
• 署名作者: MELLO, AS; PARSONS, JE; TRIANTIS, AJ
• 署名单位: Columbia University; Banco de Portugal; Universidade Catolica Portuguesa; Centre for Economic Policy Research - UK; University of Wisconsin System; University of Wisconsin Madison
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/0022-1996(94)01362-V
• 发表日期: 1995
• 页码: 27-51
• 关键词: PRODUCTION FLEXIBILITY; hedging; Currency risk

摘要

We construct a model of a multinational firm with flexibility in sourcing its production and with the ability to use financial markets to hedge exchange rate risk. Agency costs generated by the firm's capital structure create a link between the firm's financial policy and its production decisions. The firm's need for hedging is directly related to the degree of flexibility, and the production plan it chooses is a function of the hedging strategy it employs. Consequently, the firm's ability to exploit its competitive position depends upon the degree to which its flexibility is matched by the construction of an appropriate hedging strategy.