Hedging of Derivative Financial Products: Non-Finance Taiwanese Industry

This study treated 624 listed companies of non-finance and non-insurance industries in Taiwan, and analyzed the relation between derivative financial product hedging and corporate characteristics, as well as the factors influencing hedging decision-making and hedging tool selection. This study is based on event history analysis to deal with the issues of restricting, equivalence and discrete time that is superior to traditional regression model. The empirical analysis leads to the following results: (1) Companies with more growth investment opportunities, larger company scale and more financial crisis cost will tend to have derivative financial product hedging. (2) As to the influence of industrial factors, electronics, electric machinery and machinery industry is more influential on hedging of derivative financial product undertaking than other industries.