ANALYSIS OF FORTUNE 500 FIRM CHARACTERISTICS WITH ADOPTION OF CURRENCY SWAPS

The recent boom in the application of foreign currency swaps has necessitated a closer scrutiny of this instrument of low-cost financing. A questionnaire was sent to 497 of the 1991 Fortune 500 firms, requesting information concerning their use of foreign currency swaps. 146 responses were received; of which 129 were usable. The 1990 financial data of these respondent firms were retrieved to calculate the means of 13 variables. Analyses of covariance and regression using stepwise method were further applied. The results revealed that firms frequently using swaps were larger, more internationally involved and more profitable. In addition, they reported proportionately higher level of foreign taxes, but Lower total taxes.