2007 to 2009. Using balance-sheet data on firms’ positions in derivatives and their foreign exchange exposure, the paper … the volume of derivatives used during this period, but used them in line with their currency exposure – and active … explain the use of derivatives and hedging by firms but market timing in the derivative markets is explained solely by firms …

This paper investigates corporate hedging under regret aversion. Regret-averse firms try to avoid deviations of their … hedging policy from the ex post best policy, an intuitive consideration if one has to justify one's decisions afterward. The … derivatives. It characterizes optimal hedge positions and shows that regret aversion leads to stronger incentives to hedge …

-increasing/-constant strategies. Using unique data on firm-, year-, and currency-specific FX exposure before and after hedging with corresponding … hedging instruments, we are able to measure how much a CEO has been involved in risk-increasing/-constant strategies over …-increasing/-constant strategies. In addition, we find that a CEO's affiliation to the owner's family seems to reduce the amount of derivatives a firms …

. Therefore, the aim of this article is to systematise the potential risks of derivatives in the context of the past global … revealed the challenges and risks of derivatives and showed the tremendous impact that their imprudent use may have on the … certain risks. Infrastructures of the derivatives market, liquidity and an adequate supervisory framework are necessary to …

We study how risk management through hedging impacts firms and competition among firms in the life insurance industry … face costly external finance increase hedging after staggered state-level financial reform that reduces the costs of … hedging. Post reform impacted firms have lower risk and fewer negative income shocks. Product market competition is also …

derivatives transactions in Mexico along with customs data to construct a unique data set on operational exchange rate exposure … and financial hedging. We find that contrary to a rational and frictionless benchmark, performance in previous derivatives …Even though financial risk management has the ability to generate value, the use of financial derivatives among …

management (reducing currency-specific FX exposure) from speculation (increasing or holding currency-specific FX exposure …

Surveys of corporate risk management document that selective hedging, where managers incorporate their market views … into firms’ hedging programs, is widespread in the U.S. and other countries. Stulz (1996) argues that selective hedging … strength to withstand the additional risk from market timing. We study the practice of selective hedging in a 10-year sample of …