Theory indicates that hedging can increase firm value by reducing expected taxes, expected costs of financial distress, and other agency costs. Prior research, based on survey data, has found only weak evidence consistent with theory. This study provides evidence on the corporate use of...

Derivative instruments are one of the hottest topics in corporate finance. Undoubtedly, public interest has been raised by the publicity surrounding losses on derivatives transactions. Practitioners and academics are also concerned with the appropriate use of financial derivatives in global markets.