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Corporate hedging and shareholder value
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Aretz, Kevin and Bartram, Söhnke M. (2010) Corporate hedging and shareholder value. Journal of Financial Research, Vol.33 (No.4). pp. 317-371. doi:10.1111/j.1475-6803.2010.01278.x
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Official URL: http://dx.doi.org/10.1111/j.1475-6803.2010.01278.x
Abstract
Although theory suggests that corporate hedging can increase shareholder value in the presence of capital market imperfections, empirical studies show overall mixed support for rationales of hedging with derivatives. Although various empirical challenges and limitations advise some caution with regard to the interpretation of the existing evidence, the results are consistent with derivatives use being just one part of a broader financial strategy that considers the type and level of financial risks, the availability of risk management tools, and the operating environment of the firm. Moreover, corporations rely heavily on pass-through, operational hedging, and foreign currency debt to manage financial risk.
| Item Type: | Journal Article | ||||
|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HG Finance | ||||
| Divisions: | Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School |
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| Journal or Publication Title: | Journal of Financial Research | ||||
| Publisher: | Wiley-Blackwell Publishing, Inc. | ||||
| ISSN: | 0270-2592 | ||||
| Official Date: | 2010 | ||||
| Dates: |
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| Volume: | Vol.33 | ||||
| Number: | No.4 | ||||
| Number of Pages: | 55 | ||||
| Page Range: | pp. 317-371 | ||||
| DOI: | 10.1111/j.1475-6803.2010.01278.x | ||||
| Status: | Peer Reviewed | ||||
| Publication Status: | Published | ||||
| Access rights to Published version: | Restricted or Subscription Access |
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