European Financial Management,Vol.6,No.3,2000,301±318 A survey into the use of derivatives by large non-financial firms operating in Belgium MarcJ.K.DeCeuster,EdwardDurinck,EddyLaverenand andJozefLodewyckx University of Antwerp UFSIA), Prinsstraat 13, 2000 Antwerpen, Belgium, e-mail: marc.deceuster@ufsia.ac.be Abstract Empirical evidence on the use of derivatives for risk management on the European continent is virtually non-existent. To fill this gap, our survey documents the usage of derivatives by non-financial large firms operating in Belgium. This paper provides descriptive evidence with respect to several questions that are raised in the literature. Why do firms hedge? Which financial risks are being managed? How widespread is the use of derivatives? Which derivatives are used for which purposes? How is a risk management policy implemented? How are performance measurement and reporting structured? Keywords: derivatives, risk management, hedging. JEL classification: G20, G28, M40. 1. Introduction Todayallfirmsfacevarioustypesoffinancialriskinexercisingtheirdailyactivities. Coping with financial risk by moving operations back and forth across national borders is not a tractable and financially feasible solution. The rise of derivative marketshavemadeitpossibletocopewithfinancialrisksinacost-effectivewayby reducing the total risk in the system Smith, 1995, p. 23) or by shifting them to # BlackwellPublishersLtd2000,108CowleyRoad,OxfordOX41JF,UKand350MainStreet,Malden,MA02148,USA.  TheauthorswouldliketothankA.Jalilvandformakingavailablethequestionnaireheused. Furthermore we would like to thank L. Freyne Treasurer of Janssen International), W. PossemiersTreasurerofPauwelsn.v.)andF.SmuldersTreasurerofAgfaGevaert)forhelping us with the pre-testing of the questionnaire. We also benefited from suggestions made by an anonymous EFM referee, J. Annaert, A. Jorissen, E. Gysbrechts and R. Martens. The usual disclaimerapplies.WewouldliketothanktheUniversityofAntwerp'sSpecialResearchFund forfinancialsupport.