Currency management strategies within Scottish companies.

Boyle, John Joseph

Abstract

This thesis seeks to provide the first extensive study into the currency management strategies adopted by companies in Scotland, the vast majority of which are small or medium-sized, to manage the increasing risk to their business caused by volatile exchange rates. Evidence is presented of the distinguishing characteristics of the Scottish economy and Scottish business culture that justifies an examination of Scottish companies’ performance in this area. The thesis examines all aspects of currency management in Scotland through data obtained from questionnaire and interview research and statistical analysis of the data. The results presented from this research are examined in conjunction with similar studies completed in the field world-wide since volatile exchange rates became a serious business problem in the early 1970s. The use of statistical analysis in the current research allows for findings to be fully tested. An overview is also presented of the existing empirical evidence in the field and of the academic debate that has taken place on a number of currency management issues. The research seeks to resolve some of these debates and add to the empirical evidence by highlighting how corporate currency management is operating now in practice. As part of this process, seven key hypotheses are tested, derived from previous models and theories: 1. Use of currency management methods is dependent on the currency exposures incurred. 2. Currency exposures incurred are related to the internal corporate environment. 3. Use of currency management methods is related to the internal corporate environment. 4. Currency exposures incurred are dependent on company size. 5. Currency management methods used are dependent on company size. 6. The internal corporate environment is dependent on company size. 7. Currency management performance is related to corporate performance. The first five of these hypotheses are confirmed, the last one is rejected and hypothesis 6 is neither confirmed nor rejected. The research concludes that currency management has improved in small and medium-sized companies in recent years, demonstrated by a greater awareness of currency exposures and currency management strategies among these companies than in previous similar studies, but many small and medium-sized companies still have a tendency to ignore currency exposures or manage them in an unsophisticated fashion. The management of currency risk by Scottish companies does not appear to differ significantly from that of UK companies. However, it does appear to be the case that large companies and companies with an international dimension are the most advanced in managing their currency exposures.

Citation

BOYLE, J.J. 1998. Currency management strategies within Scottish companies. Robert Gordon University, PhD thesis. Hosted on OpenAIR [online]. Available from: https://doi.org/10.48526/rgu-wt-2807309

• Thesis Type: Thesis
• Deposit Date: May 29, 2025
• Publicly Available Date: May 29, 2025
• DOI: https://doi.org/10.48526/rgu-wt-2807309
• Public URL: https://rgu-repository.worktribe.com/output/2807309
• Award Date: Aug 31, 1998