Financially constrained firms can use hedging to lower the risk of financial distress. However, spending scarce … resources on hedging exacerbates the underinvestment problem of these firms. We develop a model in which this cost of hedging is …

hedging. Using meta-regression analysis to accumulate a hand-collected data set of 1016 estimates for the hedging premium … reported in 71 previous studies, we find that reported firm value effects of hedging are systematically larger for foreign … hedging premiums increase significantly when a study considers operational hedging strategies in addition to financial hedging …

We present a new approach to test the financial distress costs theory of corporate hedging empirically. We estimate the …-sectional differences in hedge ratios. Hence, our analysis adds further support for the financial distress costs theory of corporate hedging …

This study analyzes the interaction effects of corporate hedging activities of electric utility firms facing a manifold … predictability of electricity prices. As a consequence, electricity output hedging eliminates a major part of overall market risk …. Further, we identify several spillover effects of electricity output hedging: The sensitivities to input commodity prices …

mediates the relation between corporate financial hedging and firm value. In this regard, active risk management positively …, capital structure and financial hedging decisions appear rather as complements instead of substitutes. This implies that … management to carry out profitable projects and research and development activities. Overall, corporate hedging is especially …

and hedging footnote disclosures. Using a difference-in-differences design, I investigate whether these mandatory … complementary measures: (1) actual changes in firms' derivative and hedging disclosures, and (2) pre-SFAS 161 levels of firms …' derivative and hedging activities. Both measures provide consistent evidence that bid-ask spreads decreased more for firms whose …

I study dynamic hedging for variable annuities under basis risk. Basis risk, which arises from the imperfect … correlation between the underlying fund and the proxy asset used for hedging, has a highly negative impact on the hedging … performance. I investigate whether the choice of a suitable hedging strategy can help to reduce the risk for the insurance company …

In this paper, we test the hypothesis that CEO narcissism influences firms' hedging behaviour. Unlike rare but … find that these firms reduce selective hedging comparatively more following a sharp and unexpected price collapse that sent …