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ResearchPaper
2017

On the determinants of speculation - a case for extended disclosures in corporate risk management

Abstract (English)

We examine the determinants of corporate speculation and challenge the extant, conflicting evidence. Separating risk management (reducing currency-specific FX exposure) from speculation (increasing or holding currency-specific FX exposure constant), we provide unprecedented evidence that speculators are smaller, have more growth opportunities and possess lower internal resources than risk-managing firms. The refined granularity of our dataset stems from a unique regulatory environment, where a regulating authority recommends additional disclosures for FX risk management in excess of governing accounting standards. Our findings enable investors, henceforth, to identify speculation from public available sources, where our results substantiate the significance of such an extended reporting. Thus, this case of optional disclosures might serve as blueprint for further regulatory refinements in other settings.

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Publication license

Publication series

Hohenheim discussion papers in business, economics and social sciences; 2017,15

Published in

Faculty
Faculty of Business, Economics and Social Sciences
Institute
Institute of Financial Management

Examination date

Supervisor

Edition / version

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ISBN

Language
English

Publisher

Publisher place

Classification (DDC)
330 Economics

Original object

BibTeX

@techreport{Hecht2017, url = {https://hohpublica.uni-hohenheim.de/handle/123456789/6172}, author = {Hecht, Andreas}, title = {On the determinants of speculation : a case for extended disclosures in corporate risk management}, year = {2017}, school = {Universität Hohenheim}, series = {Hohenheim discussion papers in business, economics and social sciences}, }