Belghitar, YacineClark, EphraimMefteh, Salma2014-05-312014-05-312013-09-30Yacine Belghitar, Ephraim Clark, Salma Mefteh, Foreign currency derivative use and shareholder value, International Review of Financial Analysis, Volume 29, September 2013, Pages 283–2931057-5219http://dx.doi.org/10.1016/j.irfa.2012.02.004http://dspace.lib.cranfield.ac.uk/handle/1826/8490This paper investigates the effect of foreign currency (FC) derivative use on shareholder value. Exposures are broken down by currency, by whether the currency is appreciating or depreciating and by whether exposures are symmetric or asymmetric. We find that derivatives are effective in reducing overall FC exposure but there is no evidence of value creation through the application of a program that identifies and targets only loss causing exposures. We also find that FC derivative use has no significant effect on firm value in the overall sample and when the sample is broken down by eThis paper investigates the effect of foreign currency (FC) derivative use on shareholder value. Exposures are broken down by currency, by whether the currency is appreciating or depreciating and by whether exposures are symmetric or asymmetric. We find that derivatives are effective in reducing overall FC exposure but there is no evidence of value creation through the application of a program that identifies and targets only loss causing exposures. We also find that FC derivative use has no significant effect on firm value in the overall sample and when the sample is broken down by exposure type and derivative product.NOTICE: this is the author’s version of a work that was accepted for publication in International Review of Financial Analysis. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Review of Financial Analysis, Volume 29, September 2013, Pages 283–293. DOI: http://dx.doi.org/10.1016/j.irfa.2012.02.004Article