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

We use a dynamic model of cash management in which firms face competitive pressure to show that competition increases … competition has first order effects on the cash holdings and financing decisions of constrained firms, in ways consistent with our … theory …