The Informational Role of Corporate Hedging

Published Online:https://doi.org/10.1287/mnsc.2016.2717

References

  • Allayannis G, Weston J (2001) The use of foreign currency derivatives and firm market value. Rev. Financial Stud. 14:243–276.CrossrefGoogle Scholar
  • Angrist JD, Pischke J-S (2009) Mostly Harmless Econometrics: An Empiricist’s Companion (Princeton University Press, Princeton, NJ).CrossrefGoogle Scholar
  • Bank for International Settlements (BIS) (2013) Statistical release: OTC derivatives statistics at end-December 2012. Report, May 2013, http://www.bis.org/publ/otc_hy1305.pdf.Google Scholar
  • Banz RW (1981) The relationship between return and market value of common stocks. J. Financial Econom. 9:3–18.CrossrefGoogle Scholar
  • Barton J (2001) Does the use of financial derivatives affect earnings management decisions? Accounting Rev. 76:1–26.CrossrefGoogle Scholar
  • Beber A, Pagano M (2013) Short selling bans around the world: Evidence from the 2007–09 crisis. J. Finance 68:343–381.CrossrefGoogle Scholar
  • Bodnar GM, Hayt GS, Marston RC, Smithson CW (1995) How corporations use derivatives. Financial Management 24:104–114.CrossrefGoogle Scholar
  • Boehmer E, Jones C, Zhang X (2008) Which shorts are informed? J. Finance 63:491–527.CrossrefGoogle Scholar
  • Boehmer E, Reka Z, Jordan B (2010) The good news in short interest. J. Financial Econom. 96:80–97.CrossrefGoogle Scholar
  • Bolton P, Wang N, Yang J (2016) Liquidity and risk management: Coordinating investment and compensation policies. Working paper, Columbia University, New York.Google Scholar
  • Bonaimé AA, Hankins KW, Harford J (2014) Financial flexibility, risk management, and payout choice. Rev. Financial Stud. 27:1074–1101.CrossrefGoogle Scholar
  • Bris A, Goetzmann W, Zhu N (2007) Efficiency and the bear: Short sales and markets around the world. J. Finance 62:1029–1079.CrossrefGoogle Scholar
  • Buffett W (2002) Chairman’s Letter to the Shareholders of Berkshire Hathaway. Accessed February 1, 2016, http://www.berkshirehathaway.com/letters/2002pdf.pdf.Google Scholar
  • Cameron AC, Trivedi PK (2005) Microeconometrics: Methods and Applications (Cambridge University Press, Cambridge, UK).CrossrefGoogle Scholar
  • Campello M, Lin C, Ma Y, Zou H (2011) The real and financial implications of corporate hedging. J. Finance 66:1615–1647.CrossrefGoogle Scholar
  • Carter DA, Rogers DA, Simkins BJ (2006) Does hedging affect firm value? Evidence from the U.S. airline industry. Financial Management 35:53–87.CrossrefGoogle Scholar
  • Chasan E (2013) Investors seek more transparency on corporate hedging, derivatives exposures. Wall Street Journal (January 16), https://blogs.wsj.com/cfo/2013/01/16/investors-seek-more-transparency-on-corporate-hedging-derivatives-exposures/.Google Scholar
  • Chen J, Hong H, Stein JC (2002) Breadth of ownership and stock returns. J. Financial Econom. 66:171–205.CrossrefGoogle Scholar
  • Cohen L, Diether KB, Malloy CJ (2007) Supply and demand shifts in the shorting market. J. Finance 62:2061–2096.CrossrefGoogle Scholar
  • Culp CL, Miller MH (1995) Hedging in the theory of corporate finance: A reply to our critics. J. Appl. Corporate Finance 8:121–128.CrossrefGoogle Scholar
  • Daniel K, Grinblatt M, Titman S, Wermers R (1997) Measuring mutual fund performance with characteristic-based benchmarks. J. Finance 52:1035–1058.CrossrefGoogle Scholar
  • Della Vigna S, Pollet JM (2009) Investor inattention and Friday earnings announcements. J. Finance 64:709–749.CrossrefGoogle Scholar
  • DeMarzo PM, Duffie D (1991) Corporate financial hedging with proprietary information. J. Econom. Theory 53:261–286.CrossrefGoogle Scholar
  • DeMarzo PM, Duffie D (1995) Corporate incentives for hedging and hedge accounting. Rev. Financial Stud. 8:743–771.CrossrefGoogle Scholar
  • Diether K, Malloy CJ, Scherbina A (2002) Difference of opinion and the cross-section of stock returns. J. Finance 57:2113–2141.CrossrefGoogle Scholar
  • Diether K, Lee K, Werner I (2009) Short-sale strategies and return predictability. Rev. Financial Stud. 22:575–607.CrossrefGoogle Scholar
  • Dionne G, Garand M (2003) Risk management determinants affecting firms’ values in the gold mining industry: New empirical results. Econom. Lett. 79:43–52.CrossrefGoogle Scholar
  • Dionne G, Triki T (2005) Risk management and corporate governance: The importance of independence and financial knowledge for the board and the audit committee. Working paper, HEC Montreal, Quebec.Google Scholar
  • Easley D, Hvidkjaer S, O’Hara M (2002) Is information risk a determinant of asset returns? J. Finance 57:2185–2221.CrossrefGoogle Scholar
  • Engelberg J, Reed MA, Ringgenberg M (2012) How are shorts informed? Short sellers, news, and information processing. J. Financial Econom. 105(2):260–278.CrossrefGoogle Scholar
  • Fama EF, French KR (1992) The cross-section of expected stock returns. J. Finance 47:427–465.CrossrefGoogle Scholar
  • Flannery MJ, James CM (1984) The effect of interest rate changes on the common stock returns of financial institutions. J. Finance 39:1141–1153.CrossrefGoogle Scholar
  • Froot K, Scharfstein D, Stein JC (1993) Risk management: Coordinating corporate investment and financing policies. J. Finance 48:1629–1658.CrossrefGoogle Scholar
  • Géczy C, Minton BA, Schrand C (1997) Why firms use currency derivatives. J. Finance 52:323–354.CrossrefGoogle Scholar
  • Graham JR, Rogers DA (2002) Do firms hedge in response to tax incentives? J. Finance 57:815–839.CrossrefGoogle Scholar
  • Graham JR, Smith CW (1999) Tax incentives to hedge. J. Finance 54:2241–2262.CrossrefGoogle Scholar
  • Hasbrouck J (2009) Trading costs and returns for U.S. equities: Estimating effective costs from daily data. J. Finance 64:1445–1477.CrossrefGoogle Scholar
  • Hirshleifer D, Teoh SH, Yu JJ (2011) Short arbitrage, return asymmetry and the accrual anomaly. Rev. Financial Stud. 24:2429–2461.CrossrefGoogle Scholar
  • Jegadeesh N, Titman S (1993) Returns to buying winners and selling losers: Implications for stock market efficiency. J. Finance 48:65–91.CrossrefGoogle Scholar
  • Kim O, Verrecchia RE (1994) Market liquidity and volume around earnings announcements. J. Acccounting Econom. 17:41–67.CrossrefGoogle Scholar
  • Kyle AS (1985) Continuous auctions and insider trading. Econometrica 53:1315–1335.CrossrefGoogle Scholar
  • Maddala GS (1983) Limited-Dependent and Qualitative Variables in Econometrics (Cambridge University Press, Cambridge, UK).CrossrefGoogle Scholar
  • Nance DR, Smith CW Jr, Smithson CW (1993) On the determinants of corporate hedging. J. Finance 48:267–284.CrossrefGoogle Scholar
  • Patton A, Verardo M (2012) Does beta move with news? Firm-specific information flows and learning about profitability. Rev. Financial Stud. 25:2789–2839.CrossrefGoogle Scholar
  • Purnanandam A (2008) Financial distress and corporate risk management: Theory and evidence. J. Financial Econom. 87:706–739.CrossrefGoogle Scholar
  • Rampini A, Sufi A, Viswanathan S (2014) Dynamic risk management. J. Financial Econom. 111:271–296.CrossrefGoogle Scholar
  • Roll R (1984) A simple implicit measure of the effective bid-ask spread in an efficient market. J. Finance 39:1127–1139.CrossrefGoogle Scholar
  • Saffi P, Sigurdsson K (2011) Price efficiency and short selling. Rev. Financial Stud. 24:821–852.CrossrefGoogle Scholar
  • Smith CW, Stulz RM (1985) The determinants of firms hedging policies. J. Financial Quant. Anal. 20:391–405.CrossrefGoogle Scholar
  • Stock JH, Yogo M (2005) Testing for weak instruments in linear IV regression. Andrews DWK, Stock JH, eds. Identification and Inference for Econometric Models: Essays in Honor of Thomas J. Rothenberg, Chap. 5 (Cambridge University Press, New York).CrossrefGoogle Scholar
  • Stulz RM (1996) Rethinking risk management. J. Appl. Corporate Finance 9:8–25.CrossrefGoogle Scholar
  • Stulz RM (2004) Should we fear derivatives? NBER Working Paper 10574, National Bureau of Economic Research, Cambridge, MA.CrossrefGoogle Scholar
  • Tufano P (1996) Who manages risk? An empirical examination of risk management practices in the gold mining industry. J. Finance 51:1097–1137.CrossrefGoogle Scholar
  • Zhang XF (2006) Information uncertainty and stock returns. J. Finance 61:105–137.CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.