Hedging and the Use of Derivatives: Evidence from UK Non-Financial Firms

Judge, Amrit

doi:10.2139/ssrn.394990

Cited by 16 publications

(20 citation statements)

References 43 publications

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“…Allayannis and Ofek (2001), however, do not find the same relationship. Using market‐to‐book or capital expenditures to represent investment opportunities, Nance, Smith, and Smithson (1993), Mian (1996), Geczy, Minton, and Schrand (1997), Haushalter (2000), Allayannis and Ofek (2001), Crabb (2002), Judge (2005), and Reynolds and Boyle (2005) find no support for the hypothesis that firms with better growth opportunities hedge more to limit underinvestment.…”

Section: Literature Review and Hypothesesmentioning

confidence: 96%

Hedging, Financing and Investment Decisions: A Simultaneous Equations Framework

Lin

Smith

2007

The Financial Review

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: The purpose of this paper is to empirically investigate the interaction between hedging, financing, and investment decisions. This work is relevant in that theoretical predictions are not necessarily identical to those in the case where only two decisions are being made. We argue that the way in which hedging affects the firms' financing and investing decisions differs for firms with different growth opportunities. We empirically find that high-growth firms increase their investment, but not their leverage, by hedging. However, we also find that firms with few investment opportunities use derivatives to increase their leverage. Terms of use: Documents in EconStor mayJEL classification: G31, G32

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Section: Literature Review and Hypothesesmentioning

confidence: 96%

Hedging, Financing and Investment Decisions: A Simultaneous Equations Framework

Lin

Smith

2007

The Financial Review

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“…While for example Nance, Smith, and Smithson (1993) and Sprčić (2008a) did not find evidence supporting the financial distress argument, other studies found evidence that firms with lower liquidity and higher leverage are more likely to use derivatives. Among others following studies have found evidence, Dolde (1995), Mian (1996), Fok, Carroll, and Chiou (1997), Goldberg, Godwin Kim Tritschler, and Myung-Sun (1998) and Haushalter (2000), Judge (2002), Fehle and Tsyplakov (2005), Singh and Upneja (2008), Afza andAlam (2011), Adam, Fernando, andSalas (2015) and Judge (2015).…”

Section: Rationale For Corporate Hedgingmentioning

confidence: 90%

“…The empirical evidence supporting this argument is rather limited with, Berkman, Bradbury, and Magan (1997), Judge (2002), Afza and Alam (2011), having found some support of that theory in their respective samples of New Zealand, UK and Pakistani firms, while other did not found empirical support.…”

Section: Rationale For Corporate Hedgingmentioning

confidence: 95%

The Impact of Regulation on Corporate Hedging Activities and the Response of Corporates – A Preliminary Conceptual Framework

Kifle

2017

BMR

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Following the financial crisis of 2007/2008 regulators intensified the regulation of financial derivatives through (i) the implementation of the European Markets Infrastructure Directive (EMIR) to increase transparency of over-the-counter (OTC) derivatives and (ii) the implementation of Basel III to increase capital underpinning. Non-financial corporates, who mainly hedge with OTC derivatives, are seeing tendencies of increasing costs and decreasing availability of required OTC derivatives but fail to have a full concept of the impact and possible responses to manage the impact. Also, theoretical research did not consider reguation as an influencing factor and thus does not offer theories to analyse the impact of regulation on corporate hedging activities (defined as the willingness and ability of NFCs to conduct hedging in an optimal way). Given this gap, this paper reviews existing theories and based on that pre-conceptualises a model that helps to analyse the impact of regulation on corporate hedging activities and provides a preliminary conceptual framework that includes corporate responses to manage the regulatory impact.

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“…A variável "tamanho" é comumente considerada como relacionada à prática de instrumentos financeiros derivativos desde o estudo feito por Smith e Stulz (1985). Bodnar et al (1995) e Judge (2002) corroboraram esta informação em suas análises.…”

Section: ) Tamanhounclassified

“…Sheedy 2001, Judge (2002), Saito (2005), também identificaram que a proporção de receitas, custos e dívidas em moeda estrangeira tinham correlação à prática de contraírem instrumentos financeiros derivativos.…”

Section: ) Tamanhounclassified

Gerenciamos resultados com o uso de instrumentos financeiros derivativos?: evidências empíricas do cenário brasileiro

Oviedo¹

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Hedging and the Use of Derivatives: Evidence from UK Non-Financial Firms

Cited by 16 publications

References 43 publications

Hedging, Financing and Investment Decisions: A Simultaneous Equations Framework

Hedging, Financing and Investment Decisions: A Simultaneous Equations Framework

The Impact of Regulation on Corporate Hedging Activities and the Response of Corporates – A Preliminary Conceptual Framework

Gerenciamos resultados com o uso de instrumentos financeiros derivativos?: evidências empíricas do cenário brasileiro

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