Does hedging affect firm value? Evidence from the US airline industry

Financial Management

Volumn 35, Issue 1, 2006, Pages 53-86

  Carter, David A ^a   Rogers, Daniel A ^b   Simkins, Betty J ^a  

^a OKLAHOMA STATE UNIVERSITY   (United States)

^b PORTLAND STATE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 33745321735     PISSN: 00463892     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.1755-053X.2006.tb00131.x     Document Type: Review

References (48)

1. Adam, T.R., 2002, "Do Firms Use Derivatives to Reduce their Dependence on External Capital Markets?" European Finance Review 6, 163-187.
2. Adam, T., S. Dasgupta, and S. Titman, 2004, "Financial Constraints, Competition, and Hedging in Industry Equilibrium," Hong Kong University of Science and Technology and University of Texas Working Paper.
3. Allayannis, G and A. Mozumdar, 2000, "Cash Flow, Investment, and Hedging," University of Virginia and Virginia Tech Working Paper.
4. Allayannis, G. and E. Ofek, 2001, "Exchange Rate Exposure, Hedging, and the Use of Foreign Currency Derivatives," Journal of International Money and Finance 20, 273-296.
5. Allayannis, G and J.P. Weston, 2001, "The Use of Foreign Currency Derivatives and Firm Market Value," Review of Financial Studies 14, 243-276.
6. Bartov, E. and G.M. Bodnar, 1994, "Firm Valuation, Earnings Expectations, and the Exchange Rate Exposure Effect," Journal of Finance 49, 1755-1785.
7. Berkman, H. and M.E. Bradbury, 1996, "Empirical Evidence on the Corporate Use of Derivatives," Financial Management 25, 5-13.
8. Bessembinder, H., 1991, "Forward Contracts and Firm Value: Investment Incentive and Contracting Effects," Journal of Financial and Quantitative Analysis 26, 519-532.
9. Bodnar, G.M. and M.H.F. Wong, 2003, "Estimating Exchange Rate Exposures: Issues in Model Structure," Financial Management 32, 35-67.
10. Breeden, D. and S. Viswanathan, 1998, "Why Do Firms Hedge? An Asymmetric Information Model," Duke University Working Paper.
11. Brown, G.W., 2001, "Managing Foreign Exchange Risk with Derivatives," Journal of Financial Economics 60, 401-448.
12. th Attacks," Quarterly Review of Economics and Finance 44, 539-558.
13. Chung, K.H. and S.W. Pruitt, 1994, "A Simple Approximation of Tobin's Q," Financial Management 23, 70-74.
14. DaDalt, P.J., J.R. Donaldson, and J.L. Garner, 2003, "Will any Q Do? Firm Characteristics and Divergences in Estimates of Tobin's Q," Journal of Financial Research 26, 535-551.
15. DaDalt, P., G.D. Gay, and J. Nam, 2002, "Asymmetric Information and Corporate Derivatives Use," Journal of Futures Markets 22, 241-267.
16. nd Ed., John Wiley & Sons, New York.
17. Deshmukh, S. and S.C. Vogt, 2005, "Investment, Cash Flow, and Corporate Hedging," Journal of Corporate Finance 11, 628-644.
18. Dolde, W., 1995, "Hedging, Leverage, and Primitive Risk," Journal of Financial Engineering 4, 187-216.
19. Fazzari, S.R., G. Hubbard, and B. Petersen, 1988, "Financing Constraints and Corporate Investment," Brookings Papers on Economic Activity 1, 141-195.
20. Flannery, M. and C. James, 1984, "The Effect of Interest Rate Changes on the Common Stock Returns of Financial Institutions," Journal of Finance 39, 1141-1153.
21. Froot, K., D. Scharfstein, and J. Stein, 1993, "Risk Management: Coordinating Investment and Financing Policies," Journal of Finance 48, 1629-1658.
22. Gay, G.D. and J. Nam, 1998, "The Underinvestment Problem and Corporate Derivatives Use," Financial Management 27, 53-69.
23. Géczy, C., B.A. Minton, and C. Schrand, 1997, "Why Firms Use Currency Derivatives," Journal of Finance 52, 1323-1354.
24. Graham, J.R. and D.A. Rogers, 2002, "Do Firms Hedge in Response to Tax Incentives?" Journal of Finance 57, 815-839.
25. Guay, W. and S.P. Kothari, 2003, "How Much Do Firms Hedge with Derivatives?" Journal of Financial Economics 70, 423-461.
26. Haushalter, G.D., 2000, "Financing Policy, Basis Risk, and Corporate Hedging: Evidence from Oil and Gas Producers," Journal of Finance 55, 107-152.
27. Jin, Y. and P. Jorion, 2004, "Firm Value and Hedging: Evidence from US Oil and Gas Producers," Journal of Finance (Forthcoming, April 2006).
28. Jorion, P., 1990, "The Exchange-Rate Exposure of US Multinationals," Journal of Business 63, 331-346.
29. rd Ed, Cambridge, MA, MIT Press.
30. Kim, E.H. and V. Singal, 1993, "Mergers and Market Power: Evidence from the Airline Industry," American Economic Review 83, 549-569.
31. Leland, H.E., 1998, "Agency Costs, Risk Management, and Capital Structure," Journal of Finance 53, 1213-1243.
32. Mello, A.S. and J.E. Parsons, 2000, "Hedging and Liquidity," Review of Financial Studies 13, 127-153.
33. Mello, A.S. and M.E. Ruckes, 2004, "The Role of Hedging in Product Market Rivalry," University of Wisconsin Working Paper.
34. Mian, S.L., 1996, "Evidence on Corporate Hedging Policy," Journal of Financial and Quantitative Analysis 31, 419-439.
35. Myers, S.C. and N.S. Majluf, 1984, "Corporate Financing and Investment Decisions When Firms Have Information that Investors Do Not Have," Journal of Financial Economics 13, 187-221.
36. Nance, D.R., C.W. Smith, Jr., and C.W. Smithson, 1993, "On the Determinants of Corporate Hedging," Journal of Finance 48, 267-284.
37. Pantzalis, C., B.J. Simkins, and P. Laux, 2001, "Operational Hedges and the Foreign Exchange Exposure of US Multinational Corporations," Journal of International Business Studies 32, 793-812.
38. Perfect, S.B. and K.W. Wiles, 1994, "Alternative Constructions of Tobin's Q: An Empirical Comparison," Journal of Empirical Finance 1, 313-341.
39. Petersen, M.A. and S.R. Thiagarajan, 2000, "Risk Measurement and Hedging: With and Without Derivatives," Financial Management 29, 5-30.
40. Pulvino, T.C., 1998, "Do Asset Fire Sales Exist? An Empirical Investigation of Commercial Aircraft Transactions," Journal of Finance 53, 939-978.
41. Pulvino, T.C., 1999, "Effects of Bankruptcy Court Protection on Asset Sales," Journal of Financial Economics 52, 151-186.
42. Rogers, D.A., 2002, "Does Executive Portfolio Structure Affect Risk Management? CEO Risk-Taking Incentives and Corporate Derivatives Usage," Journal of Banking and Finance 26, 271-295.
43. Schrand, C. and H. Unal, 1998, "Hedging and Coordinated Risk Management: Evidence from Thrift Convenions," Journal of Finance 53, 979-1013.
44. Smith, C.W, Jr. and R.M. Stulz, 1985, "The Determinants of Firms' Hedging Policies," Journal of Financial and Quantitative Analysis 20, 391-405.
45. Stulz, R.M., 1996, "Rethinking Risk Management," Journal of Applied Corporate Finance 9, 8-24.
46. Tufano, P., 1996, "Who Manages Risk? An Empirical Examination of Risk Management Practices in the Gold Mining Industry," Journal of Finance 51, 1097-1137.
47. Tufano, P., 1998, "Agency Costs of Corporate Risk Management," Financial Management 27, 67-77.
48. Warren, S., 2005, "Hedge Hog Southwest Air Sharpens Its Teeth," Wall Street Journal, May 19, C1.