Hedging, financing, and investment decisions: Theory and empirical tests

What do we really know about corporate hedging? A meta-analytical study

“…In this case, our estimates contradict with the majority of studies. These deviations might be driven by a notable endogeneity between capital structure and the decision to hedge, as corporate hedging might also be seen as the starting point of the capital structure decision (Bartram et al 2009;Lin and Smith 2007;Lin et al 2008). For liquidity, we reveal a negative association with the decision to hedge, which is only in line with the findings reported in Pincus and Rajgopal (2002) and the two previous reviews.…”

Disaggregation, auditor conservatism and implied cost of equity capital: An international evidence from the GCC

“…They also share similar features such as their political regimes and the application of similar accounting standards (IAS/IFRS). Therefore, we expect the DMRD index score to be in-variant in some years and, motivated by the prior empirical studies (e.g., Lin et al 2008;Khurana et al 2006), we report our results based on year fixed effects. The un-tabulated results are consistent.…”

“…In addition, Terjesen et al (2009) and Adams and Ferreira (2009) suggest that having a female director improves firms' governance level and also the allocation of more monitoring efforts as harder questions are asked within the board to improve firms' value; therefore, we include female director (FemaleMem) as an instrument that correlates to disaggregation disclosures. Finally, for firms with more hedging activities that have more market risk exposures to disclose (Lin et al 2008;DeMarzo and Duffie 1995), we add a dummy variable at 1 if the firm supplements their market risk exposures in the annual report with hedging disclosure (HD); otherwise 0.…”

The Real and Financial Implications of Corporate Hedging

“…Under this premise, tax convexity is a plausible instrument for hedging in a loan spread regression. Indeed, using the Graham-Smith tax-convexity construct, prior papers have found support for the hypothesis that …rms hedge with the goal of minimizing taxes (e.g., Dionne and Garand (2003), Dionne and Triki (2005), and Lin et al (2008)). Others, however, …nd only weak evidence of this e¤ect (e.g., Graham and Rogers (2002)).…”