The Real and Financial Implications of Corporate Hedging
Publication in refereed journal


香港中文大学研究人员 ( 现职)


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Web of Sciencehttp://aims.cuhk.edu.hk/converis/portal/Publication/35WOS source URL

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摘要We study the implications of hedging for corporate financing and investment. We do so using an extensive, hand-collected data set on corporate hedging activities. Hedging can lower the odds of negative realizations, thereby reducing the expected costs of financial distress. In theory, this should ease a firm's access to credit. Using a tax-based instrumental variable approach, we show that hedgers pay lower interest spreads and are less likely to have capital expenditure restrictions in their loan agreements. These favorable financing terms, in turn, allow hedgers to invest more. Our tests characterize two exact channels-cost of borrowing and investment restrictions-through which hedging affects corporate outcomes. The analysis shows that hedging has a first-order effect on firm financing and investment, and provides new insights into how hedging affects corporate value. More broadly, our study contributes novel evidence on the real consequences of financial contracting.

着者Campello M, Lin C, Ma Y, Zou H
期刊名称JOURNAL OF FINANCE
出版年份2011
月份10
日期1
卷号66
期次5
出版社WILEY-BLACKWELL
页次1615 - 1647
国际标準期刊号0022-1082
电子国际标準期刊号1540-6261
语言英式英语

Web of Science 学科类别Business & Economics; Business, Finance; BUSINESS, FINANCE; Economics; ECONOMICS