2. Universidad Cardenal Herrera-CEU

Purpose: This study aims to identify whether Latin American (LA) firms are adopting any hedging strategy when designing Foreign Exchange Risk (FXR) measures. To that end, we explore the impact of several drivers of FXR management. Design/methodology/approach: The sample consists of 342 non-financial listed firms established in a group of representative countries of the LA region and covers the period from 2008 to 2016. Hypothesis testing is performed through a Logit model that measures the likelihood to adopt hedging practices. In addition, a Tobit test offers further insights into the derivatives users. Findings: We corroborate capital structure related hypotheses such as tax goals, financial distress, liquidity, and growth opportunities. In addition, both, ownership concentration and income tax payable seem to be negative and significant determinants of FXR coverage. Originality/value: Results reported in this study are relevant for the LA region with high tradition in raw materials and commodities exports. Our results show that LA firms still make limited use of derivatives and there is still much room for improvement. Hence, additional efforts to promote FXR hedging should be desirable, to meet authorities’ recommendations (OECD, World Bank, and IMF, 2007). Further research exploring Corporate Governance (CG) relationships and differences between large and small firms might be helpful.

In spite of the fact that there is empirical evidence that debt tax benefits add to firm value, additionalresearch is needed to explain the apparently conservative debt policy of many firms. This study exam-ines whether the costs of debt and non-debt tax related issues might shed some light on the apparent“conservative leverage puzzle” for Spanish listed firms throughout the period 2007–2013. Specifically,we compare the costs of financial distress with the potential tax benefits of debt. In addition, we testwhether debt conservativeness, measured by the kink, is explained by different costs of debt and non-debt tax shields. Our findings suggest that the most conservative Spanish listed firms may not be actingsub-optimally with respect to the tax advantage of debt financing. Furthermore, the results obtained areconsistent with the belief that debt costs might offset the tax benefits stemming from debt financing, anddebt and non-debt tax shields could act as substitutes. / nA pesar de que existe evidencia empírica de que las ventajas fiscales de la deuda se suman al valour de laempresa, es necesaria más investigación para explicar la política de deuda aparentemente conservadorade muchas empresas. Este estudio analiza si las cuestiones fiscales de la deuda y aquellas no relacionadascon la deuda podrían arrojar algo de luz sobre el aparente «rompecabezas de fuerza conservadora»de las empresas cotizadas espa˜nolas durante el período 2007-2013. Específicamente se comparan loscostes de dificultades financieras con las ventajas fiscales de la deuda. Además, probamos si el conser-vadurismo de la deuda, medido por el colapso, se explica por los diferentes costes de los escudos fiscalesrelacionados con la deuda o alternativos a esta. Nuestros resultados sugieren que las empresas cotizadasespa˜nolas más conservadoras quizá no estén actuando de manera subóptima respecto a la ventaja fiscalde la financiación de la deuda. Además, los resultados obtenidos son coherentes con la creencia de quelos costes de la deuda podrían contrarrestar las ventajas fiscales derivadas de la financiación de la deuda,y los escudos fiscales relacionados con la deuda y alternativos a la deuda podrían actuar como sustitutos.