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Risk management based on hedging tools in an export-oriented economy

Author

Listed:
  • Viktoriia Prokhorova

    (Ukrainian Engineering Pedagogics Academy)

  • Iryna Abernikhina

    (Institute of Industrial and Business Technologies of the Ukrainian State University of Science and Technologies)

  • Svitlana Mushnykova

    (Institute of Industrial and Business Technologies of the Ukrainian State University of Science and Technologies)

  • Olena Bozhanova

    (Institute of Industrial and Business Technologies of the Ukrainian State University of Science and Technologies)

  • Olena Toporkova

    (Dnipro Institute of Infrastructure and Transport of the Ukrainian State University of Science and Technologies)

Abstract

The object of this study is the process of risk management at enterprises in the metallurgical industry as a subject of foreign economic activity. Under the conditions of an export-oriented economy, it is important to have tools for early response to crises and challenges caused by various factors. Volatility of the market and global and domestic prices for key products and raw materials add uncertainty and encourage management to look for tools to protect their financial income. The construction of a risk map and the use of mathematical tools for forecasting and minimizing the negative consequences of the occurrence of risky events could contribute to making optimal management decisions in operational activities and in the pricing process. Interpretation of the risk management cycle for the needs of enterprises in the metallurgical industry will make it possible to adequately identify the risks inherent in the industry and devise measures for flexible response to crises and challenges. In the course of the study, it was found out that exporting companies need protection, first of all, against price risk, which increases significantly under the conditions of inflation and due to jumps in the consumer price index in a particular country. It is suggested to use hedging as a protection tool. Determining the perimeter of risk hedging by means of a risk-oriented selection of indicators (external and internal, commercial, and non-commercial risks) depending on a certain market situation will make it possible to establish a correlation between key influencing factors. The implementation of the risk-hedging cycle in the practice of the enterprises in the metallurgical industry will make it possible to ensure flexible management of the pricing procedure for metal products both in the domestic market and during foreign trade

Suggested Citation

  • Viktoriia Prokhorova & Iryna Abernikhina & Svitlana Mushnykova & Olena Bozhanova & Olena Toporkova, 2024. "Risk management based on hedging tools in an export-oriented economy," Eastern-European Journal of Enterprise Technologies, PC TECHNOLOGY CENTER, vol. 2(13 (128)), pages 26-34, April.
    • Handle: RePEc:baq:jetart:v:2:y:2024:i:13:p:26-34
    DOI: 10.15587/1729-4061.2024.299651
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    References listed on IDEAS

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    4. Akhtaruzzaman, Md & Banerjee, Ameet Kumar & Le, Van & Moussa, Faten, 2024. "Hedging precious metals with impact investing," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 651-664.
    5. Będowska-Sójka, Barbara & Demir, Ender & Zaremba, Adam, 2022. "Hedging Geopolitical Risks with Different Asset Classes: A Focus on the Russian Invasion of Ukraine," Finance Research Letters, Elsevier, vol. 50(C).
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    Cited by:

    1. Svitlana Mushnykova & Viktoriia Prokhorova & Anatoliy Babichev & Iryna Abernikhina & Olena Karlova & Nataliia Babiak, 2024. "Revealing the influence of systemic risks in the development of enterprises on updating their investment position under entropy conditions," Eastern-European Journal of Enterprise Technologies, PC TECHNOLOGY CENTER, vol. 4(13 (130)), pages 44-54, August.

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