Proceedings of the First International Conference of Economics, Business & Entrepreneurship, ICEBE 2020, 1st October 2020, Tangerang, Indonesia

Research Article

Determinants of Corporate Hedging Activities with Financial Distress as a Moderating Variable

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  • @INPROCEEDINGS{10.4108/eai.1-10-2020.2305563,
        author={Ninuk Dewi Kesumaningrum and Raden Weddie Andriyanto},
        title={Determinants of Corporate Hedging Activities with Financial Distress as a Moderating Variable},
        proceedings={Proceedings of the First International Conference of Economics, Business \& Entrepreneurship, ICEBE 2020, 1st October 2020, Tangerang, Indonesia},
        publisher={EAI},
        proceedings_a={ICEBE},
        year={2021},
        month={4},
        keywords={leverage institutional ownership company size company growth opportunity financial distress hedging agency theory},
        doi={10.4108/eai.1-10-2020.2305563}
    }
    
  • Ninuk Dewi Kesumaningrum
    Raden Weddie Andriyanto
    Year: 2021
    Determinants of Corporate Hedging Activities with Financial Distress as a Moderating Variable
    ICEBE
    EAI
    DOI: 10.4108/eai.1-10-2020.2305563
Ninuk Dewi Kesumaningrum1,*, Raden Weddie Andriyanto1
  • 1: University of Lampung
*Contact email: ninukdewi@gmail.com

Abstract

This study aims to explore determinant variables of corporate hedging activities with financial distress as a moderating variable based on Agency Theory. Determinant variables tested were leverage, institutional ownership, company size, and company growth opportunity. Several companies in Indonesia have carried out hedging activities to protect operational and financial risks resulting from international trade. Sampling used with a purposive sampling technique and selected 165 companies from all companies listed on the Indonesia Stock Exchange in 2012-2018. This study found that leverage, institutional ownership, company size, and company growth opportunity significantly affect corporate hedging activities. Moreover, financial distress strengthens the effect of the independent variables on the dependent variable.