Determining Factors by using Hedging Policies Derivative Instruments in Non-Financial Companies in Indonesia
Journal Title: International Journal of Social Science Humanity & Management Research - Year 2022, Vol 1, Issue 06
Abstract
The purpose of this study is to examine the determinants of hedging policy in manufacturing companies listed on the Indonesian Effect Exchange. The determining factors tested in this study are financial distress, market to book value of equity, and liquidity against the company's hedging policy with foreign currency derivative instruments. The proxy used to measure financial distress is the debt-to-equity ratio (DER). Market to book value of equity (MBVE) is usually to measure firm value and current ratio as a proxy for liquidity. This study uses panel data. The study was conducted on 41 companies and 246 observations during the period 20102015. This study used a logistic regression model. The results showed that financial distress, firm value, and liquidity had a significant influence on hedging policy. The results of testing on the second hypothesis, financial distress affected. positive and significant impact on hedging policies in public companies listed on the Indonesian Stock Exchange. The test results on the second hypothesis, firm value have a positive and significant effect on hedging in public companies listed on the Indonesian Stock Exchange. The test results on the third hypothesis, liquidity has a negative effect. and significant to the hedging policy of public companies listed on the Indonesia Stock Exchange.
Authors and Affiliations
Yusbardini
Keywords
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