Risk management should not be the primary concern of a firm operating in an efficient stock market (Modigliani and Miller, 1958). Shareholders can manage their individual risk by holding well-diversified portfolios (Fama, 1980). But managers sometimes operate on the basis that their future earning opportunities will be affected by the continued existence and not necessarily profitability of the firms which they manage, thereby exhibiting agency problems (Coase, 1937; Fama, 1980). ?In this paper, it is argued that managers operating in corrupt countries will exhibit greater agency problems by acting contrary to shareholders interest and by seeking less risk at the expense of lower returns (Habib and Zurawicki, 2001). We seek to establish the extent of the agency problem based on the level of currency hedging in which managers engage and we argue that in corrupt countries, all other things equal, more hedging will take place, acting counter to (Modigliani and Miller, 1958), as managers act to preserve their personal wealth, in the form of annual salaries, which is closely tied to firm longevity, rather than firm profitability.
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机译：风险管理不应成为在有效股票市场中运作的公司的主要关注点（Modigliani和Miller，1958年）。股东可以通过持有多元化的投资组合来管理个人风险（Fama，1980）。但是管理者有时的运作是基于他们未来的赚钱机会会受到他们所管理企业的持续存在的影响，而不一定是他们所管理企业的获利能力，从而出现代理问题（Coase，1937; Fama，1980）。在本文中，有人认为，在腐败国家中经营的经理人会通过与股东利益背道而驰，并通过降低风险以牺牲较低的收益为代价来寻求更大的代理问题（Habib and Zurawicki，2001）。我们试图根据管理者参与的货币对冲水平来确定代理问题的程度，并且我们认为在腐败的国家中，在其他所有条件相同的情况下，将会出现更多的对冲，这与（Modigliani and Miller，1958）背道而驰。 ，因为经理们采取行动以年薪的形式来保存自己的个人财富，这与公司的长寿而不是公司的盈利能力紧密相关。
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