Beschreibung:
In this study, I implemented data scraping and textual analysis to parse corporate data from the 10-K filings on SEC EDGAR. Textual analysis is used to measure a company’s risk aversions and hedging strategies when confronted with exchange rate exposures. I selected data of trading companies from 2019 when the international trade wasn't affected by the pandemic. In the regression results, I find no significant correlation between a company’s exchange rate exposures and its hedging strategies; instead, there is a negative correlation between the exchange rate exposure and the proportion of foreign sales out of total sales. Companies with total assets under 151 billion US dollars show a stronger negative correlation. Companies from the service sector show a positive correlation between their exchange rate exposure and hedging strategies, which means hedging under US dollar appreciation and depreciation strengthens the capital gains and aggravates the capital losses respectively