How Much Do Firms Hedge with Derivatives

By W. Guay, S. Kothari. 2003

652 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/82f70eab5ef10a16ee9a9e29725ecf9066fd2ca9

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Citations in the corpus

Offshore activities and financial vs operational hedging (2017, neutral): “For example, Guay and Kothari (2003) state “corporate derivatives use appears to be a small piece of non-financial firms’ overall risk profile.”
The Value of Enterprise Risk Management (2011, neutral): “…of these prior studies find evidence of a positive relationship between specific forms of risk management and the value of the firm, others such as Guay and Kothari (2003) suggest that corporate derivatives positions in general are far too small to account for the valuation premiums reported in…”
Does Hedging Affect Firm Value? Evidence from the US Airline Industry (2006, positive): “Guay and Kothari (2003) suggest that most sample firms used in many prior studies defining hedging using interest rate and/or currency derivatives may be unable to gain significant benefits from their derivative holdings.”
The Use of Foreign Currency Derivatives, Corporate Governance, and Firm Value Around the World (2012, neutral): “…of oil refiners and Bartram et al. (2011) find a positive valuation effect in a large sample of nonfinancial firms from 47 countries.3 However, Guay and Kothari (2003) argue that based on the magnitudes of the notional amounts of the derivatives used by U.S. firms, the value implications of…”
CORPORATE HEDGING AND SHAREHOLDER VALUE (2010, background): “At the same time, corporations do not just use financial derivatives, but rely heavily on passthrough, operational hedging, and foreign currency debt to manage financial risk (Bartram, Brown and Minton, 2009; Guay and Kothari, 2003; Kedia and Mozumdar, 2003).”
The Two Sides of Derivatives Usage: Hedging and Speculating with Interest Rate Swaps (2011, background): “1Examples include broad cross-sectional analyses such as Nance, Smith, and Smithson (1993), Mian (1996), Geczy, Minton, and Schrand (1997), Graham and Smith (1999), Guay (1999), Allayannis and Ofek (2001), Graham and Rogers (2002), Guay and Kothari (2003), Bartram, Brown, and Fehle (2009), and Bartr”
The Characteristics of Firms That Hire Chief Risk Officers (2010, positive): “Our study complements Nance, Smith and Smithson (1993) who examine firms’ use of hedging instruments and Guay and Kothari (2003) who examine the hedging activities of non-financial firms.”
The Effect of the Enterprise Risk Management Implementation on the Firm Value of European Companies (2013, background): “However, Guay and Kothari (2003) and Jin and Jorion (2006) discover that derivative positions of most non-financial companies are too small to significantly affect firm value.”
Policy uncertainty, derivatives use, and firm-level FDI (2017, background): “7Baker et al. (2016) collect a list of related papers and refer to them on the following website: http:// www.policyuncertainty.com/research.html 8Overall, Guay and Kothari (2003) suggest rethinking past empirical research on firms’ derivatives use.”
The exchange rate exposure puzzle (2005, neutral): “…the value changes of the derivatives portfolios of nonfinancial firms are small relative to firm’s operating cash flows, suggesting that derivatives are used to fine-tune an overall risk management program that makes effective use of operational and other forms of hedging (Guay and Kothari, 2003).”
Does Enterprise Risk Management Increase Firm Value? (2011, background): “As discussed previously, Guay and Kothari (2003) and Jin and Jorion (2006) present arguments on possible problems with previous work that finds a positive relationship between hedging and firm value.”