The Impact Of Foreign Exchange Risk Hedging On Enterprise Value

Since the reform and opening up,China's rapid economic development,the degree of reform and opening up of financial markets in recent years has gradually entered the deep water area,and the formation mechanism of the RMB is also in exploration.Especially since the exchange rate reform in 2005 to a two-way exchange rate fluctuations of RMB exchange rate liberalization to today from the long-term appreciation trend into the trend of depreciation,the exchange rate volatility continue to deepen,facing the internationalization of China's enterprise foreign exchange risk exposure also increased gradually,the foreign exchange risk is also gradually influence on firm value.With the field of China's foreign exchange derivatives of forwards,swaps,financial futures,commodity category gradually open,and the interest rate and the exchange rate market gradually,all kinds of risk hedging tools can provide a means of hedging risk for Chinese enterprises.However,China derivatives market has not been sufficient development,listed companies are also the lack of relevant experience,whether to hedge foreign exchange tools can significantly improve the enterprise value also has some controversy,especially the previous research to establish the basic interval in the long-term appreciation of the RMB,not on the trend of devaluation.Therefore,it is of great practical significance to study the hedging of foreign exchange risk,especially in the presence of a significant downward trend of RMB.Based on the above research background,this paper selected our country with international enterprise characteristics of listed companies,pay attention to the use of foreign exchange hedging instruments,research on the relationship between the use of hedging tools and enterprise value in the devaluation of the trend in the hope that the theoretical basis of foreign exchange risk management to further improve the internationalization of China's enterprises.This paper uses the method of combination of theoretical research and empirical research,based on the review of previous research ideas and related theory of enterprise internationalization,enterprise value and foreign exchange risk hedging,and study the foreign exchange risk hedging on firm value influence path,and come to represent the enterprise value with the value of Tobin Q from the theoretical study,at the same time with the hedge ratio that the use of hedging tools,and finally find out the financial indicators can also influence enterprise value as the control variables of the.Then according to the changes and characteristics of the floating range of RMB exchange rate,the time period for the interception of 2014 to 2016,according to the situation intensified during exchange rate fluctuations,analyzes the practical use of hedging instruments to influence international business enterprise value.After choosing the time interval,the paper studies the relationship between hedging and firm value in two steps.The first step: first,through the construction of international enterprise screening index(import and export revenue to total revenue of 15% and above)of China's listed companies to carry out targeted selection,use and retrieve the hedge,and then the research variables and independent variables corresponding to a set of descriptive statistical analysis.The results show that the 515 companies have 16% foreign exchange hedging instruments,the ratio is low;sample the import and export of the median income ratio was 37%,and the Tobin Q values are generally greater than 1,showed that the internationalization of China's enterprises have a better investment opportunities.The second step: through analyzing the first step,this sample data is mixed crosssectional data,has gradually analyzed by least square method,fixed effect and time point of regression way;finally the results of stability test.The results show that the RMB devaluation trend,the use of hedging tools to the internationalization of enterprises to enhance the value of about 11%,after the sensitivity test revealed that the premium rate decreased,but still significantly enhance the value of the results.Finally,according to the above two steps empirical results and the related factors that influence the enterprise value,this paper puts forward some suggestions for improving the foreign exchange risk management ability of China's international enterprises.