“…Extant empirical studies following the agency theoretical concept of Jin and Myers (2006) argue that opaque financial reporting and information environment increase the possibilities of a stock price crash (e.g., Hutton, Marcus, & Tehranian, 2009;DeFond, Hung, Li, & Li, 2015;Ertugrul, Lei, Qiu, & Wan, 2017). Meanwhile, the empirical results on the influence of corporate hedging on information environment are mixed (e.g., DaDalt, Gay, & Nam, 2002;Manconi, Massa, & Zhang, 2018;Chang, Donohoe, & Sougiannis, 2016). We provide evidence on the effect of hedging with derivatives on information environment by exploring whether and how hedging activities have an impact on crash risk.…”