Hedging Or Speculation? A Study On The Purpose Identification And Influencing Factors Of Foreign Exchange Derivatives Used In Chinese Listed Companies

In February 2016,Our country made a further adjustment in foreign exchange reform,added a reference to a basket of pricing variables,based on 2% of the RMB central parity,making this pricing mechanism more market-oriented and transparent.but also means enterprises will face a significant increase in exchange rate risk with the volatility of the foreign exchange rate,.Foreign exchange derivatives are one of the tools to hedge exchange rate risk.However,The participation of Chinese enterprises in foreign exchange derivatives is low.The sample shows that only 16.3% of enterprises use foreign exchange derivatives.However,Foreign exchange derivatives is also a double-edged sword,Domestic enterprises in the use of derivatives had caused frequent losses,some enterprises' over speculation made financial innovation on the expected opposite.Most companies refuse to enter into the foreign exchange market,leading to its Fluctuating due to exchange rate fluctuations.Based on this,This paper attempts to analyze whether the use of foreign exchange derivatives can achieve the goal of hedging,and further identify the use of foreign exchange derivatives incentives and research on the factors of using foreign exchange derivatives.We obtained the following results through empirical analysis:(1)Through the two-stage regression analysis,we first measure the coefficient of exchange rate exposure of each firm and recognize that most listed companies use foreign exchange derivatives as hedging.(2)There are also a small number of enterprises to carry out speculative arbitrage transactions,compared with state-owned companies,private companies use foreign exchange derivatives more inclined to speculation arbitrage.Through the PSM matching score analysis,manufacturing enterprises face greater risk of exchange rates than non-manufacturing enterprises,they tend to use foreign derivative as hedging.(3)Using Logistic model and Tobit model to test the influencing factors of the use and use degree of foreign exchange derivatives,it is found that the influence of enterprise scale,manager pay and transnational operation on foreign exchange derivatives is positive,Reduce the financial distress cost hypothesis did not get evidence.The hypothesis of avoiding "insufficient investment" And managementdecision-making hypothesis have been proved,indicating that the size of enterprises and general manager of the salary will increase the use of foreign exchange derivatives and the extent of the use of tax savings hypothesis in the robustness test was confirmed.(4)The impact of the use of foreign exchange derivatives on private enterprises is more obvious than that of state-owned enterprises,enterprise scale,R & D cost and exchange rate risk.and the effect of general manager's remuneration on the decision-making of derivative use of state-owned enterprises is more significant.It is hoped that the research of this paper will let listed companies pay more attention to the exchange rate risk,especially private enterprises,so as to make the foreign exchange market more profound and correct understanding,and more effectively encourage the hedging of enterprises and strengthen the awareness of exchange rate risk prevention,And business managers for speculation arbitrage operations against the proposed behavior of punishment,to maintain the financial market order,so that the foreign exchange market can be healthy and stable developed.