Firm executives’ financial background and the use of foreign Exchange derivatives— evidence from China

This paper examines whether executives’ financial background affect the use of foreign exchange derivatives for China’s multinational corporations. Using manually collected data to measure the use of foreign currency derivatives from non-financial listed companies in China from 2010 to 2019, we show that: (1) firms with financial-background executives are more likely to use foreign currency derivatives for hedging; (2) the results remain robust after using instrumental variables and different measures of executives’ financial background; (3) the impact of executives’ financial background on the decision of using foreign currency derivatives various across firms in different financial development regions and with different ownerships.