What Factors Affect Hedging? Empirical Evidance from Indonesia

Mega Barokatul Fajri, Guruh Marhaenis Handoko Putro, Jennifer Farihatul Bait, Ira Megasyara


This research aims to analyze each of the operational and financial factors that can be used as variables influencing decisions and the intensity of hedging. There are two test analysis model used in this study, the first to test the company decision to hedge as a measured by using dummy variables and the second model is used to test the intensity of the company in hedging as measured by the ratio of derivative and natural logarithm of derivative. By using Probit and Tobit regression, the results of the logistic regression test show that financial factors such as financial distress, and leverage, and so operational factors such as foreign sales variables did not influence the firm's decisions and intensity in carrying out hedging activities. Foreign debt variables, profitability, and firm size that include financial factors have a positive influence on company decisions and intensity in carrying out hedging decisions, while the last part of financial factors such as growth opportunity variables only has a positive effect on company decisions in carrying out hedging activities and have no effect on the intensity of firms in hedging activities. The liquidity variable has a negative influence on the decisions and intensity of the company in conducting hedging activities. The originality of this study lies in the intensity factor of the use of hedging on the company's operations and finances in hedging, whereas in previous studies only focused on the influence of factors that can influence hedging decisions.


Hedging; Operational Factors; Financial Factors

Full Text:



Aditya, Angga T., A. N. (2019). Pengaruh Leverage, Likuiditas, Market To Book Value, Financial Distress dan Firm Size Terhadap Keputusan Hedging Sektor Consumer Goods Industry Periode 2011-2016. Jurnal Ilmu Manajemen, 7(2), 334–343.

Ammer, R. (2010). Determinants of Corporate Hedging Practices in Malaysia. International Business Research, 3(2), 120–130.

Aretz, K. (2010). Corporate Hedging and Shareholder Value. Journal of Financial Research, 33(4), 317–371.

Bank Indonesia. (2019). Jumlah Utang dan Tingkat ekspor dan Impor di Industri Manufaktur. Bank Indonesia. www.bi.go.id

Bappenas. (2019). Jumlah Perdagangan Internasional yang dilakukan oleh sektor manufaktur. Bappenas. www.bappenas.go.id

Bartram, S. M. (2019). Corporate hedging and speculation with derivatives. Journal of Corporate Finance, 57, 9–34. https://doi.org/10.1016/j.jcorpfin.2017.09.023

Brigham, Eugene F., M. C. E. (2014). Financial Management Theory and Practice. Cengage Learning Asia Pte Ltd.

Davies, D., Eckberg, C., & Marshall, A. (2006). The determinants of norwegian exporters’ foreign exchange risk management. European Journal of Finance, 12(3), 217–240. https://doi.org/10.1080/13518470500249274

Dharmiyanti, N. M. D., & Darmayanti, N. P. A. (2020). The Influence of Liquidity, Growth Opportunities, and Firm Size on Non-Finance Companies’ Hedging Policy in Indonesia Stock Exchange. American Journal of Humanities and Social Sciences Research, 4(1), 129–135. www.ajhssr.com

Gay, G. D. (2011). Corporate Derivatives Use and The Cost of Equity. Journal of Banking & Finance, 35(6), 1491–1506.

Géczy, C., Minton, B. A., & Schrand, C. (1997). Why firms use currency derivatives. Journal of Finance, 52(4), 1323–1354. https://doi.org/10.1111/j.1540-6261.1997.tb01112.x

Geyer-Klingeberg, J., Hang, M., Rathgeber, A. W., Stöckl, S., & Walter, M. (2018). What do we really know about corporate hedging? A meta-analytical study. Business Research, 11(1). https://doi.org/10.1007/s40685-017-0052-0

Guniarti, F. (2014). Faktor-Faktor yang Memengaruhi Aktivitas Hedging Dengan Instrumen Derivatif Valuta Asing. Jurnal Dinamika Manajemen, 5(1), 46–79.

Hanafi, M. (2016). Manajemen Keuangan (Kedua). Yogyakarta: BPFE.

Iqbal, N., Saqib, M., Iqbal Chaudhry Assistant Professor, N., Saqib Mehmood, M., & Mehmood, A. (2014). Munich Personal RePEc Archive Determinants of corporate hedging policies and derivatives usage in risk management practices of non-financial firms Determinants of Corporate Hedging Policies and Derivatives Usage in Risk Management Practices of Non-Financi. 57562. https://doi.org/10.13140/2.1.4257.8560

Judge, A. (2006). Why and How UK Firms Hedge. European Financial Management Journal, 12(3), 407–441.

Kim, W., & Sung, T. (2005). What makes firms manage FX risk? Emerging Markets Review, 6(3), 263–288. https://doi.org/10.1016/j.ememar.2005.06.002

Lantara, I. W. N. (2012). The Use of Derivatives as a Risk Management Instrument: Evidence From Indonesia Non Financial Firms. International Journal of Business and Economics, 11(1), 45–62.

Listiana R & Niken P. (2022). Pengaruh Market To Book Value, Liquidity, Leverage, Altman Z-Score, Firm Size, Dan Profitabilitas Terhadap Keputusan Hedging (Studi Kasus Perusahaan Dalam Daftar JII70 2018-2020). Jurnal Akuntansi & Keuangan, 13(2), 42–56.

Rokhmi, S. (2017). Faktor-Faktor Yang Memengaruhi Keputusan Hedging Pada Perusahaan Manufaktur. Jurnal Ilmu Dan Riset Manajemen, 6(5).

Saraswati, A. P. (2019). Pengaruh Leverage , Firm Size , Profitabilitas Terhadap Keputusan Hedging Pada Perusahaan Manufaktur Di Bursa Efek Indonesia 8(5), 2999–3027.

Sasmita, I. & H. (2019). Perusahaan, Karakteristik Distress, Financial Keputusan, D A N Studi, Hedging Perusahaan, Pada Di, Manufaktur. 7.

Shapiro, Alan, C. (2014). Multinational Financial Management. Asia: Willey & Sons.

Tandelilin, E. (2017). Pasar Modal Manajemen Portofolio & Investas (Kedua). Yogyakarta: Kanisius.

Triaryati, N., & Jiwandhana, R. S. P. (2016). Pengaruh Leverage dan Profitabilitas terhadap Keputusan Hedging Perusahaan Manufaktur Indonesia. E-Jurnal Manajemen Unud, 5(1), 31–58.

Zhu, M, R. (2011). Corporate Hedging, Financial Distress and Product Market Competition.

DOI: https://doi.org/10.18860/mec-j.v7i1.19277


  • There are currently no refbacks.

Copyright (c) 2023 Mega Barokatul Fajri, Guruh Marhaenis Handoko Putro, Jennifer Farihatul Bait, Ira Megasyara

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Editorial Office:
Faculty of Economics,
State Islamic University of Maulana Malik Ibrahim Malang
Gajayana Street 50, Malang-East Java, Indonesia 65144
Phone (+62) 341 558881, Facsimile (+62) 341 558881
e-mail: mecjournal@uin-malang.ac.id



P-ISSN 2599-3402
E-ISSN 2598-9537

Lisensi Creative Commons

MEC-J is licensed under CC-BY-SA
© All rights reserved 2017.




Member of:


View My Stats