futures contracts. Their hedging demand is met by financial intermediaries who act as speculators, but are constrained in risk …-taking. Increases (decreases) in producers’ hedging demand (the risk-bearing capacity of speculators) increase the costs of hedging … 1980-2006, we show that producers’ hedging demand - proxied by their default risk - forecasts spot prices, futures prices …

This paper examines and compares the effectiveness of hedging and buffer-stock strategies for stabilizing the revenues …

We analyse the effects of insider trading on real investment and welfare, and the consequences of different regulatory …

stochastic. It then uses the results to explain the dynamics of hedging. Bankruptcy rules are important determinants of corporate … produce the same prices, they can have very different hedging implications. We show that empirical results on the relation …

’ – is a more effective way of securing investment in high cash flow states. This trade-off implies that constrained firms … will allocate cash flows into cash holdings if their hedging needs are high (i.e., if the correlation between operating … cash flows and investment opportunities is low). Those same firms, however, will use free cash flows to reduce current debt …

Exchange risk hedging in a static (i.e. one-period) setting is extremely straightforward. The variance-minimizing hedge …