Foreign Exchange Derivatives' Influence On Firms' Value

After nearly forty years of China's reform and opening policy, especially after China's accession to WTO in 2001,the firms' scientific and technological capacity is becoming stronger and stronger.Our country's foreign export trade grows rapidly.Since the foreign exchange reform of China in 2005,the exchange rate volatility increase quickly,the enterprises,especially the import and export enterprises had to face more and more risk.Part of Chinese public companies are using foreign exchange derivatives to hedging the foreign exchange risk.Foreignal scholars have made an in-depth research of the influence of derivatives on corporation,but because of the accounting policy,there are little empirical research on Chinese companies.In this paper, we use the the non-financial export company in CSI 300 as our sample,use the multiple regression model ofempirical method to examine the relationship between the derivatives and the firms' value,and control other varialbes that may influence the firms' value,found that the usage of foreign derivatives can enhance about 12% of the firms' value,the conclusion is similar with most of the foreignal scholars' research.From this empirical research we suggest our country should advance the speed of establishment of the foreign exchange derivatives market,accelerate the process of RMB's internationalization,strengthen the enterprise risk management,to ensure the national strategy “One Belt One Road”.