Berrospide, Jose M.; Purnanandam, Amiyatosh; Rajan, Uday - Federal Reserve Board (Board of Governors of the … - 2008
.7-7.8% higher than non-user firms. Hedging with currency derivatives allows firms to sustain larger capital investments, and also …, Scharfstein, and Stein (1993), at a time when capital in the economy as a whole is scarce. We further show that hedging increases … the foreign currency debt capacity of a firm, and that foreign debt is a cheaper source of capital than domestic debt …
