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Empirical research has focused on export as a proxy for the exchange rate exposure and the use of foreign exchange derivatives as the instrument to deal with this exposure. This empirical study applies an integrated foreign exchange risk management approach with a particular focus on the role of import in medium-sized, manufacturing firms in Denmark (a small, open economy). The authors find a strong, negative relation between import and foreign exchange derivatives usage on the aggregate level. Their findings are consistent with the notion that firms use import to match the foreign exchange exposure created by foreign sales activities.
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