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      • Bilkent Theses
      • Theses - Department of Management
      • Dept. of Management - Master's degree
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      Use of currency hedging instruments by non-financial Turkish firms

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      Author
      Akay, Mustafa
      Advisor
      Önder, Zeynep
      Date
      2018-09
      Publisher
      Bilkent University
      Language
      English
      Type
      Thesis
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      Abstract
      Having significant exchange rate exposure, Turkish non-financial firms face both operational and financial risk caused by exchange rate movements. Despite not being as deep as in the developed countries, Turkish financial markets offer currency hedge instruments. Although Turkish firms have option for hedging against currency risk, it is observed that use of those instruments is not common for Turkish firms. This thesis aims to examine firm specific factors that affect the use of hedging instruments as well as the degree of hedging. A sample of 178 Turkish non-financial firms listed in Borsa Istanbul is examined for the period between 2007 and 2017. The use of currency derivatives is considered appropriate representation of hedging tendency for Turkish firms, as FX positions of firms arise from derivative contracts are reported accurately in disclosures of financial reports. It is found that firm size and leverage have a positive effect on the probability of using currency derivatives whereas fixed asset ratio has negative effect. Moreover, liquidity buffer as a substitute for derivative usage is found to reduce the degree of hedging.
      Keywords
      Currency Derivatives
      Foreign Exchange Position
      Hedging
      Turkish Non- Financial Firms
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      http://hdl.handle.net/11693/47898
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      • Dept. of Management - Master's degree 295
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