Erschienen in:Dresden Discussion Paper in Economics ; No. 17/09
Umfang:
1 Online-Ressource (16 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.1550035
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 9, 2010 erstellt
Beschreibung:
We present a model of risk averse exporting firm subject to liquidity constraints. The firm enters an unbiased futures market to hedge exchange rate risk and may not be able to satisfy high margin calls. Then the firm is forced to prematurely liquidate the futures position. We show that preferences and expectations become important for optimum export and hedging decisions, i.e. separation theorem and full hedge theorem are violated. Furthermore, international trade is affected, for only firms that have sufficient financial resources fully exploid gains from trade