The effect of family ownership on corporate hedging: the case of Thailand

We explore how corporate hedging decisions are affected by family ownership and control in Thailand. One crucial advantage of investigating this issue in Thailand is that hedging instruments became available only recently, long after families established their presence in the firm. Thus, endogeneity is much less likely. The evidence shows that family ownership by itself does not have a significant impact on the firm’s propensity to hedge. However, when family members have a presence on the board of directors, the firm is significantly more likely to engage in hedging activities. Furthermore, we find that the presence of institutional blockholders also increases the likelihood of hedging significantly. Our study is the first to examine the impact of family ownership and control on corporate hedging behaviour in an emerging market.