Asymmetric Information and Corporate Risk Management by Using Foreign Currency Derivatives
2012 ◽
Vol 15
(01)
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pp. 1250004
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Keyword(s):
We examine how information asymmetry affects a firm's incentive to hedge versus speculate by using foreign currency derivatives. We find a quadratic relation between asymmetric information and a firm's risk management activities. In particular, we find that the firms facing medium level of information asymmetry are more likely to hedge, while firms with very high and low levels of asymmetric information tend to speculate. Moreover, we find that our results hold primary for firms operating in highly competitive industries.
2013 ◽
Vol 40
(1-2)
◽
pp. 239-271
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2004 ◽
Vol 44
(5)
◽
pp. 727-750
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2018 ◽
Vol 54
(3)
◽
pp. 1447-1468
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2007 ◽
Vol 19
(4)
◽
pp. 82-93
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