Foreign currency borrowing and risk-hedging behavior: Evidence from Cambodian households

Daiju Aiba*, Ken Odajima, Vouthy Khou

*この研究の対応する著者

研究成果: Article査読

10 被引用数 (Scopus)

抄録

Foreign currency borrowing, also known as financial dollarization given the dominance of the U.S. dollar, is a growing issue in developing countries. This study investigates the determinants of foreign currency borrowing of households in Cambodia using survey data. We find that Cambodian households engage in risk-hedging behavior against exchange rate risks in the sense that their likelihood of borrowing in foreign currency increases as the share of foreign currency in their incomes increases. We also found that expectations of depreciation in the local currency inclined households more toward borrowing in local currency, as would be predicted. Finally, better educated households are more likely to make loan currency choices consistent with risk hedging while less educated households are more inclined to be influenced by the currency used in purchases. Similarly, household use of financial services, which like education may serve to proxy financial literacy, is correlated with risk-hedging behavior against currency mismatch risks. These results suggest that financial literacy has the potential to enhance risk-hedging behavior against exchange rate risks for Cambodian households.

本文言語English
ページ(範囲)19-35
ページ数17
ジャーナルJournal of Asian Economics
58
DOI
出版ステータスPublished - 2018 10月
外部発表はい

ASJC Scopus subject areas

  • 財務
  • 経済学、計量経済学

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