scholarly journals The Impact of Commodity Price Risk on Firm Value - An Empirical Analysis of Corporate Commodity Price Exposures

2005 ◽  
Vol 9 (3/4) ◽  
pp. 161-187 ◽  
Author(s):  
Söhnke M. Bartram ◽  
Keyword(s):  
Empirical Analysis ◽  
Firm Value ◽  
Commodity Price ◽  
Price Risk ◽  
The Impact

scholarly journals The Effect of Hedging with Financial Derivatives on Firm Value at Indonesia Stock Exchange

2019 ◽  
Vol 65 (1) ◽  
pp. 20
Author(s):  
Budi Frensidy ◽  
Tasya Indah Mardhaniaty
Keyword(s):  
Interest Rate ◽  
Firm Value ◽  
Foreign Currency ◽  
Stock Exchange ◽  
Commodity Price ◽  
Financial Derivatives ◽  
Price Risk ◽  
Financial Risks ◽  
Positive Relation ◽  
Derivative Instruments

This study aims to analyze the effect of hedging for the risks of foreign currency, interest rate, and commodity price on firm value as measured by Tobin’s Q. The findings reveal that hedging with derivative instruments is insignificantly related to firm value but significantly varied in financial risks. Hedging for foreign currency risk has a significantly positive relation to firm value, while hedging for interest rate and commodity price risk has no relation. Furthermore, this study provides a novelty compared to previous studies in the utilization of the extent of hedging as the variable to measure the implementation of hedging.

scholarly journals Does Debt Diversification lead to a Discount in Firm Value?

2019 ◽  
Vol 8 ◽  
pp. 24-30 ◽  
Author(s):  
Nemiraja Jadiyappa ◽  
Namrata Saikia ◽  
Bhavik Parikh
Keyword(s):  
Empirical Analysis ◽  
Capital Markets ◽  
Firm Value ◽  
Free Rider ◽  
Multiple Sources ◽  
Free Rider Problem ◽  
A Value ◽  
Alternative Measures ◽  
Debt Holders ◽  
The Impact

Corporate firms access multiple sources of debt simultaneously. This study analyzes the impact of debt diversification on firm value. We argue that, when firms diversify their debt sources, the monitoring role played by debt holders decreases as a result of the free rider problem. Hence, such firms should experience a value discount in the capital markets. Our empirical analysis provides evidence for the existence of a value discount in the capital markets for firms accessing multiple sources of debt. Our results remain robust for alternative measures of debt diversification.

The impact of commodity price risk management on the profits of a company

2011 ◽  
Vol 36 (4) ◽  
pp. 346-353 ◽  
Author(s):  
Hans Ulrich Buhl ◽  
Sofie Strauß ◽  
Julia Wiesent
Keyword(s):  
Risk Management ◽  
Commodity Price ◽  
Price Risk ◽  
The Impact ◽  
A Company ◽  
Price Risk Management

scholarly journals The effect of hedging exchange rate risk, interest rate risk and commodity price risk with derivative instruments on firm value

2021 ◽  
pp. 1707-1714
Author(s):  
Nadhifah Almas ◽  
Chandra Wijaya ◽  
Fibria Indriati ◽  
Sekar Anindyaswari
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Interest Rates ◽  
Firm Value ◽  
Commodity Price ◽  
Interest Rate Risk ◽  
Price Risk ◽  
Exchange Rate Risk ◽  
Rate Risk ◽  
Derivative Instruments

The purpose of this paper is to analyze the effects of firm value on hedging for exchange rates, interest rates and commodity price risks using derivative instruments as well as examining different types of derivative instruments, including forward contract, future contract, option contract, and swap contract, used as hedging instruments to assess their various effects on firm value. The proxy used for the firm value variable is Tobin’s Q, and the ordinary least squares regression is employed for the research method. The study used 348 records from non-financial companies listed on the Indonesia Stock Exchange over the period 2015–2018. There are different results. First of all, the use of hedging for exchange rate risk with derivative instruments has a positive and significant effect on firm value. Secondly, the use of hedging for interest rate risk with derivative instruments has a negative but not significant effect on firm value. In addition, the use of hedging for commodity price risk with derivative instruments has a positive but not significant effect on firm value. Moreover, the effects from hedging using derivative contracts in general on firm value does not give results that are different from the use of hedging risk for exchange rates, interest rates and commodity prices with derivative instruments.

scholarly journals Measuring the financial effects of mitigating commodity price volatility in supply chains

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Barbara Gaudenzi ◽  
George A. Zsidisin ◽  
Roberta Pellegrino
Keyword(s):  
Supply Chain ◽  
Risk Mitigation ◽  
Price Volatility ◽  
Commodity Price ◽  
Price Risk ◽  
Costs And Benefits ◽  
Content Type ◽  
Advantages And Disadvantages ◽  
Commodity Price Volatility ◽  
The Impact

Purpose Firms can choose from an array of approaches for reducing the detrimental financial effects caused by unfavorable fluctuations in commodity prices. The purpose of this paper is to provide guidance for effectively estimating the financial effects of mitigating commodity price risk volatility (CPV) in supply chain management decisions. Design/methodology/approach This paper adopts two prominent and complementary methodologies, namely, total cost of ownership (TCO and real options valuation (ROV), to illustrate how commodity price risk mitigation strategies can be analyzed with respect to their effect on costs and performance. The paper provides insights through a case study to demonstrate the application of these methods together and establish the benefits and challenges associated with their implementation. Findings The paper illustrates advantages and disadvantages of TCO and ROV and how these approaches can be adopted together to contribute to effective purchasing decisions. Supply chain flexibility is a key capability but requires investments. Holistically measuring the financial effects of flexibility investments is imperative for gaining executive management support in mitigating commodity price volatility. Research limitations/implications This study can provide supply chain professionals with useful guidance for measuring the costs and benefits related to developing strategies for mitigating commodity price volatility. TCO provides a focus on the costs associated with the commodity purchasing process, and ROV enables the aggregation of all the costs and benefits associated with the use of the strategy and synthesizes them into the net value estimate. Originality/value The paper provides a comparison of different but complementary approaches, specifically TCO and ROV, for analyzing the effectiveness of CPV risk mitigation decisions. In addition, these two methods allow supply chain professionals to evaluate and control the financial effects of CPV risk, particularly the impact of mitigation on firm’s cash flows.

Overcoming stereotypes of renewable energy

2019 ◽  
pp. 124-136
Author(s):  
Victor D. Gazman
Keyword(s):  
Renewable Energy ◽  
Empirical Analysis ◽  
Energy Generation ◽  
New Paradigm ◽  
Financial Instrument ◽  
Promising Direction ◽  
Investment Projects ◽  
Power Stations ◽  
New Generation ◽  
The Impact

The article considers prerequisites for the formation of a new paradigm in the energy sector. The factors that may affect the imminent change of leadership among the energy generation are analyzed. The variability of the projects of creation and functioning of power stations is examined. The focus is made on problematic aspects of the new generation, especially, storage and supply of energy, achieving a system of parity that ensures balance in pricing generations. The author substantiates the principles of forming system of parities arising when comparing traditional and new generations. The article presents the results of an empirical analysis of the 215 projects for the construction of facilities for renewable energy. The significance and direction of the impact of these factors on the growth in investment volumes of transactions are determined. The author considers leasing as an effective financial instrument for overcoming stereotypes of renewable energy and as a promising direction for accelerated implementation of investment projects.

Globalization, Poverty, Environmental Degradation and Economic Growth Nexus: Empirical Analysis of SAARC Regions

2020 ◽  
Vol 39 (1) ◽  
Author(s):  
Adiqa Kiani ◽  
Ejaz Ullah ◽  
Khair Muhammad
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Empirical Analysis ◽  
Environmental Degradation ◽  
Negative Relationship ◽  
Policy Makers ◽  
Significant Negative Relationship ◽  
The Impact

The main objective of this study is to investigate the impact of poverty, globalization, and environmental degradation on economic growth in the selected SAARC countries. This study is employed panel Autoregressive Distributive Lag (ARDL) technique for empirical analysis using selected SAARC regions including India, Pakistan, Bangladesh, Nepal and Sri Lanka over the period of 1980 to 2018. Globalization impacts economic growth positively and significantly.  In addition to this the significant negative relationship is found between population and economic growth. The results show that poverty is positively related with environmental degradation. Furthermore, the results indicate that globalization is positively and significantly associated with environmental degradation in the SAARC region. Finally, the results show that urbanization is positive and significantly associated with environmental degradation, which could be the serious concerns for the policy makers to control.

ICT SMEs, Performance, Absorptive Capacity and Transformative Capacity

2019 ◽  
Vol 118 (3) ◽  
pp. 178-188
Author(s):  
Yeon-Sung Cho ◽  
Kyung-Il Khoe
Keyword(s):  
Firm Performance ◽  
Market Orientation ◽  
Empirical Analysis ◽  
Absorptive Capacity ◽  
Latent Variables ◽  
Equation Modeling ◽  
Transformative Capacity ◽  
The Impact ◽  
The Empirical Analysis ◽  
Innovative Capacity

This study intends to integrate the relationship of market orientation, innovative capacity and firm performance to Information and Communication Technology(ICT) SMEs. The purpose of this study is to identify the role of absorptive capacity and transformative capacity that affect the performance of ICT SMEs. Hypotheses were established between five latent variables. A total of six hypotheses were established including the moderated effects of absorptive capacity and transformative capacity. Of the data collected after the survey, 112 valid surveys were selected as the final sample, except for 17 questionnaires with high non - response and insincere response. The empirical analysis of this study used smartpls3.0, Partial Least Squares (PLS), a variance-based structural equation modeling. The empirical analysis of this study revealed that the impact of market orientation on innovative capacity was significant. Moreover, the innovative capacity had a positive effect on the performance of ICT SMEs. In addition, the absorptive activity had a positive moderated effect between the market orientation and the innovative capacity. On the other hand, the transformative capacity showed a positive moderated effect in relation to innovative capacity and firm performance. Our empirical results have demonstrated the importance of knowledge based capacity in the ICT SMEs.

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