Abstract
This paper examines the determinants of the currency denomination of debt decision of Australian and New Zealand firms and compares it with that of Asian firms around the 1997 Asian crisis. Unlike existing research, our model of currency choice controls for location choice, and includes firm and country specific determinants. The results show demand for hedging is the primary determinant of foreign currency borrowing by Australian and New Zealand firms. In Asian firms however, firm leverage, country political risk and interest rate differentials determine the currency denomination of debt. There is no support for the hedging hypothesis in Asian firms.
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