Allayannis and Weston look at firms that hedge currency exposure. They find that the hedging premium is statistically and economically significant mostly after 1993 and is on average 5.7% of firm value. This result is robust to a) controls for size, profitability, leverage, growth opportunities, ability to access financial markets, industrial and geographical diversification, credit quality, industry classification (4-digit SIC), year-dummies and firm fixed-effects; b) the use of a weight-adjusted industry Tobin's Q and other measures of value,such as the market to book and the market to sales ratios; and,c) alternative estimation techniques that handle the potential impact of outliers." (hint: in English it says that hedging increases firm value!)
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