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dc.contributor.authorAdam, Tim R.en_US
dc.contributor.authorFernando, Chitru S.en_US
dc.contributor.authorSalas, Jesus M.en_US
dc.date.accessioned2012-02-22en_US
dc.date.accessioned2012-04-05T16:15:39Z-
dc.date.available2012-04-05T16:15:39Z-
dc.date.issued2012en_US
dc.identifier.urihttp://hdl.handle.net/10419/56664-
dc.description.abstractSurveys of corporate risk management document that selective hedging, where managers incorporate their market views into firms' hedging programs, is widespread in the U.S. and other countries. Stulz (1996) argues that selective hedging could enhance the value of firms that possess an information advantage relative to the market and have the financial strength to withstand the additional risk from market timing. We study the practice of selective hedging in a 10-year sample of North American gold mining firms and find that selective hedging is most prevalent among firms that are least likely to meet these valuemaximizing criteria - (a) smaller firms, i.e., firms that are least likely to have private information about future gold prices; and (b) firms that are closest to financial distress. The latter finding provides support for the alternative possibility suggested by Stulz that selective hedging may also be driven by asset substitution motives. We detect weak relationships between selective hedging and some corporate governance measures, especially board size, but find no evidence of a link between selective hedging and managerial compensation.en_US
dc.language.isoengen_US
dc.publisherSFB 649, Economic Risk Berlinen_US
dc.relation.ispartofseriesSFB 649 discussion paper 2012-019en_US
dc.subject.jelG11en_US
dc.subject.jelG14en_US
dc.subject.jelG32en_US
dc.subject.jelG39en_US
dc.subject.ddc330en_US
dc.subject.keywordcorporate risk managementen_US
dc.subject.keywordselective hedgingen_US
dc.subject.keywordspeculationen_US
dc.subject.keywordfinancial distressen_US
dc.subject.keywordcorporate governanceen_US
dc.subject.keywordmanagerial compensationen_US
dc.subject.stwGoldbergbauen_US
dc.subject.stwRisikomanagementen_US
dc.subject.stwHedgingen_US
dc.subject.stwSpekulationen_US
dc.subject.stwCorporate Governanceen_US
dc.subject.stwManagervergütungen_US
dc.subject.stwSchätzungen_US
dc.subject.stwUSAen_US
dc.titleWhy do firms engage in selective hedging?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn686615093en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:SFB 649 Discussion Papers, HU Berlin

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