Price-Risk Hedging of Thai Rubber Industries

Abstract

Based on producers’ behavior, this study focused primarily on probability to hedging decisions in futures market against the price risk of rubber entrepreneurs. Moreover, this study investigated the factors that influenced the hedging decisions of rubber entrepreneurs. A survey with a cross-sectional study was conducted. A sample of 80 entrepreneurs from natural rubber industries and rubber product industries was proportionally selected. A questionnaire, which was pre-tested and a high acceptable reliability was used. Descriptive and inferential statistics were performed to describe the respondent’s profile and attitude, as well as to test the established hypotheses. The result showed that the respondents were non-futures usage more than futures usage groups. The variables including type of product, level of risk aversion and multi-attribute attitude were affected to hedging decisions in futures usage. It can be concluded that hedging decisions depend on multi-factors and also, it should be applied to investigate the factors affected price-risk hedging of other industries. It ought to survey on other group of population such as farmer, middleman, exporter, and consumer who utilize the similar marketing strategies.