Victoria University

An investigation of foreign exchange risk management by exporting small and medium sized enterprises

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dc.contributor.advisor Lindsay, Valerie
dc.contributor.advisor Gao, Hongzhi
dc.contributor.advisor Roberts, Leigh Dang, Vu 2015-10-05T21:56:33Z 2015-10-05T21:56:33Z 2015 2015
dc.description.abstract Previous studies on foreign exchange (forex) risk management have tended to focus on multinational enterprises; while how SMEs manage their forex risk is still largely unexplored. As small and medium sized enterprises (SMEs) are increasingly involved in international markets, they have become a new research setting on forex risk management. Given that SMEs have limited access to resources, skills and capabilities, internal hedging techniques could be favoured by SMEs. There is limited research on this matter, and the extant literature on forex management generally considers derivatives as major hedging techniques for large firms. This thesis primarily investigates how exporting SMEs manage forex risk. In addition, approaches to forex management could be changed as a firm becomes more experienced internationally. Following the basic principles of internationalisation theory, the thesis also examines the impact of the internationalisation degree of the firm on forex management decisions. This thesis sheds new light on SMEs’ hedging practices by providing a better understanding of SMEs’ choices of forex risk management. Three research questions have been raised: (1) what determinants influence SMEs’ choice to hedge as a way of managing forex risk; (2) what strategies do SMEs use when they choose hedging to manage forex exposure; and (3) how does the degree of internationalisation impact the choice of forex management. The thesis draws on two theoretical perspectives to help address these overarching questions. It extends the use of the resource-based view (RBV), and combines this with internationalisation theory. The setting of SMEs is a context for using the RBV. New Zealand and Australian exporting SMEs provide the sample for testing the hypotheses. The contributions of this thesis are twofold. Firstly, the thesis identifies four determinants of forex risk strategy by exporting SMEs, i.e. degree of internationalisation (specifically, export ratio), forex exposure, perceived forex risk, and resources. Secondly, it extends the use of the RBV and the internationalisation theory in forex risk management of SMEs. In addition, the thesis uses a research approach combining an exploratory qualitative study and a main quantitative study. en_NZ
dc.language.iso en_NZ
dc.publisher Victoria University of Wellington en_NZ
dc.subject Foreign exchange en_NZ
dc.subject Hedging en_NZ
dc.subject Resources en_NZ
dc.title An investigation of foreign exchange risk management by exporting small and medium sized enterprises en_NZ
dc.type Text en_NZ
vuwschema.contributor.unit School of Marketing and International Business en_NZ
vuwschema.contributor.unit University Library en_NZ
vuwschema.type.vuw Awarded Doctoral Thesis en_NZ International Business en_NZ Victoria University of Wellington en_NZ Doctoral en_NZ Doctor of Commerce en_NZ
dc.rights.license Creative Commons GNU GPL en_NZ
dc.rights.license Allow modifications, as long as others share alike en_NZ
dc.rights.license Allow commercial use en_NZ 2015-10-02T04:10:38Z
vuwschema.subject.anzsrcfor 150308 International Business en_NZ
vuwschema.subject.anzsrcseo 900101 Finance Services en_NZ
vuwschema.subject.anzsrctoa 1 PURE BASIC RESEARCH en_NZ

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