This research analyzes the different strategies of financial risk management, based on the results of an empirical survey on the practices of financial risk management implemented by non-financial French firms. Financial risks are the risk of commodity, currency risk and interest rate risk. Four different management strategies are defined and identified; the internalization of risks, the management with operational tools as the netting, the management with linear derivatives as forwards and management with optional derivatives. After identifying these strategies, a strategic choice model is developed. This model seeks to identify the determinants and predictors of choosing a strategy rather than another one. The Multinomial logistic model explains these strategic choices by financial and structural characteristics of firms. This model is tested and an alternative is developed with the logistic nested model. Beyond these models, the purpose of this research is to develop a management model. This model explains which financial risk management strategy, the firm implement according to their characteristics. The empirical results show that the sophistication of the hedging strategy increases as business and size growth. Finally, the discussion focuses on the difference between the two concurrent models and their explanatory power. This analysis shows that the superiority of the nested logit model is relative and evaluating the marginal effects of the explanatory variables on the choice of strategies according the two competitors models indicates that the choice of one or the other may change conclusions of this analysis.
