The Effect of Firm Size, Leverage, and Liquidity on Hedging Decisions of Consumer Goods Industryon the Indonesia Stock Exchange

ABSTRACT:Consumer goods companies that conduct foreign exchange transactions will experience risk offoreign currency exposure. The purpose of this study is to explain the effect of firm size, leverage, and liquidityon hedgingdecisions in consumer goods industry on the Indonesia StockExchange for the period of 2014-2018.Sampling in this study using purposive sampling technique and got as many as 36 companies that meet thecriteria with 180 years of company observation. The data method uses the non-participant observation methodthrough the company’s annual financial reports published on the IDX official website at www.idx.co.id. Thedata analysis technique used in this study is logisticregression analysis technique. The results show that firm sizehas a positivesignificant effect on hedging decisions, leverage has a negative insignificant effect on hedgingdecisions, and liquidity has a negative significanteffect on hedging decisions.

KEYWORDS : Firm Size, Leverage, Liquidity, Hedging.