We exploit an exogenous change in basis risk in the oil and gas industry to analyze the channels through which hedging …-order channels through which hedging affects firm value …

I incorporate the choice of hedging instrument into a moral hazard model to study the impact of derivatives on a firm …'s value. A hedging instrument creates value by minimizing the expected costs of distress. In the model, managers who exert … as a hedge. I show that the optimal hedging instrument maximizes the firm's value but does not reduce the noise in the …

, derivatives hedging and operating flexibility, in the presence of several frictions. We show that liquidity serves a critical and … hedging is likely to be low, though we explain why some empirical studies find a higher value. We explore the complex … are affected by operating leverage, the nature of operating flexibility, and the effectiveness of the hedging instrument …

derivatives for hedging activities. Based on a sample of 300 Malaysian listed companies, we found that only 162 companies (54 …

This study investigates the effect of corporate hedging on stock price crash risk. We test two competing hypotheses …. Under the transparency hypothesis, hedging reduces a firm's information asymmetry and lowers crash risk. Under the opacity … hypothesis, hedging decreases financial reporting quality and increases crash risk. Using a comprehensive sample of firms from …

This research focuses on the ultimate impact of hedging effectiveness on firm performance. Successful risk management … quarterly earnings per share). We empirically estimate the hedging profile of 5,586 non-financial firms (spanning 25 industries … and other firm characteristics – identifies the impact of the firm's hedging profile on firm performance. We find a strong …

Using a hand-collected data, we provide evidence of extensive use of commodity derivative in hedging among U.S oil and … gas producers. We find large variations in hedging intensity and hedging profits while on average they generate … significant positive profits. The profits relate positively to the intensity of hedging. We further decompose the hedge ratio into …

We examine the efficiency of hedging a credit derivative portfolio with a contrary position in a credit index in the …, the implied adjustments in capital charges could be reduced by the mentioned hedging strategy, and we show that there is … volatility are high. Increases in VIX, in the 10-year swap rate or in liquidity risk tend to decrease hedging efficiency …