Investigating the determinants of the decision to engage in a corporate hedging strategy

Au Yong, H. H., Faff, R. and Nguyen, H. (2006) Investigating the determinants of the decision to engage in a corporate hedging strategy. Journal for Studies in Economics and Econometrics, 30 147-160.

Author Au Yong, H. H.
Faff, R.
Nguyen, H.
Title Investigating the determinants of the decision to engage in a corporate hedging strategy
Journal name Journal for Studies in Economics and Econometrics   Check publisher's open access policy
ISSN 0379-6205
Publication date 2006
Sub-type Article (original research)
Volume 30
Start page 147
End page 160
Total pages 14
Place of publication Stellenbosch, South Africa
Publisher Universiteit Stellenbosch, Bureau for Economic Research
Language eng
Abstract This paper investigates the decision to engage in a comprehensive corporate hedging strategy for Australian listed companies. Specifically the pursuit of a comprehensive hedging strategy is gauged by jointly investigating the corporate use of foreign currency derivatives; interest rate derivatives; commodity derivatives and foreign debt. The results show that firm size, leverage, dividend yield and block holdings are incentive factors to the comprehensive hedging decision, while executive shares is a disincentive factor. Consistent with hedging theory, the significance of the leverage variables supports the financial distress cost hypothesis. Support is also found for the dividend decision is a substitute for corporate hedging.
Keyword Corporate hedging
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Unknown

Document type: Journal Article
Sub-type: Article (original research)
Collections: ERA 2012 Admin Only
UQ Business School Publications
 
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Created: Mon, 07 Mar 2011, 10:21:27 EST by Karen Morgan on behalf of UQ Business School