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Article: Why do firms (not) hedge? - Novel evidence on cultural influence

TitleWhy do firms (not) hedge? - Novel evidence on cultural influence
Authors
KeywordsCulture
Derivatives
Energy utilities
Hedging
Risk management
Issue Date2014
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jcorpfin
Citation
Journal of Corporate Finance, 2014, v. 25, p. 92-106 How to Cite?
AbstractWe examine whether cultural differences between countries help in explaining firms' hedging decisions. For this, we manually collect data on the hedging behavior of worldwide energy utilities. The analysis reveals a strong impact of a country's long-term orientation, which reduces the probability for hedging and the hedged volume. The only other factor with a consistently higher economic impact is firm size. Furthermore, hedging with options is less common in countries with a high level of masculinity. Overall, the results reveal that culture has a strong impact on the hedging behavior of firms. This influence is not captured by other country-specific factors such as economic development or the legal framework. © 2013 Elsevier B.V.
Persistent Identifierhttp://hdl.handle.net/10722/210046
ISSN
2015 Impact Factor: 1.286
2015 SCImago Journal Rankings: 1.446

 

DC FieldValueLanguage
dc.contributor.authorLievenbrück, M-
dc.contributor.authorSchmid, T-
dc.date.accessioned2015-05-21T03:14:09Z-
dc.date.available2015-05-21T03:14:09Z-
dc.date.issued2014-
dc.identifier.citationJournal of Corporate Finance, 2014, v. 25, p. 92-106-
dc.identifier.issn0929-1199-
dc.identifier.urihttp://hdl.handle.net/10722/210046-
dc.description.abstractWe examine whether cultural differences between countries help in explaining firms' hedging decisions. For this, we manually collect data on the hedging behavior of worldwide energy utilities. The analysis reveals a strong impact of a country's long-term orientation, which reduces the probability for hedging and the hedged volume. The only other factor with a consistently higher economic impact is firm size. Furthermore, hedging with options is less common in countries with a high level of masculinity. Overall, the results reveal that culture has a strong impact on the hedging behavior of firms. This influence is not captured by other country-specific factors such as economic development or the legal framework. © 2013 Elsevier B.V.-
dc.languageeng-
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jcorpfin-
dc.relation.ispartofJournal of Corporate Finance-
dc.subjectCulture-
dc.subjectDerivatives-
dc.subjectEnergy utilities-
dc.subjectHedging-
dc.subjectRisk management-
dc.titleWhy do firms (not) hedge? - Novel evidence on cultural influence-
dc.typeArticle-
dc.identifier.emailSchmid, T: schmid@hku.hk-
dc.identifier.authoritySchmid, T=rp02028-
dc.identifier.doi10.1016/j.jcorpfin.2013.10.010-
dc.identifier.scopuseid_2-s2.0-84889673906-
dc.identifier.volume25-
dc.identifier.spage92-
dc.identifier.epage106-
dc.publisher.placeNetherlands-

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