Hedging Affecting Firm Value via Financing and Investment: Evidence from Property Insurance Use

Financial Management

Volumn 39, Issue 3, 2010, Pages 965-996

  Zou, Hong ^a  

^a CITY UNIVERSITY OF HONG KONG   (Hong Kong)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 78649479369     PISSN: 00463892     EISSN: 1755053X     Source Type: Journal    
DOI: 10.1111/j.1755-053X.2010.01101.x     Document Type: Article

References (58)

1. Adam, T.R. and C.S. Fernando, 2006, "Hedging, Speculation, and Shareholder Value, "Journal of Financial Economics 81, 283-309.
2. Adams, M.B., P. Hardwick, and H. Zou, 2008, "Reinsurance and Corporate Taxation in the United Kingdom Life Insurance Industry, "Journal of Banking and Finance 32, 101-115.
3. Allayannis, G., U. Lel, and D. Miller, 2003, "Corporate Governance and the Hedging Premium around the World, "Darden Graduate School of Business Administration, University of Virginia Working Paper.
4. Allayannis, G. and J.P. Weston, 2001, "The Use of Foreign Currency Derivatives and Firm Market Value, "Review of Financial Studies 14, 243-276.
5. Aunon-Nerin, D. and P. Ehling, 2008, "Why Firms Purchase Property Insurance, "Journal of Financial Economics 90, 298-312.
6. Bai, C-E., Q. Liu, J. Lu, F.M. Song, and J. Zhang, 2004, "Corporate Governance and Market Valuation in China, "Journal of Comparative Economics 32, 599-616.
7. Bartram, S.M., G.W. Brown, and F.R. Fehle, 2009, "International Evidence on Financial Derivatives Use, "Financial Management 38, 185-206.
8. Bodnar, G.M., G.S. Hayt, and R.C. Marston, 1998, "Wharton 1998 Survey of Financial Management by U.S. Non-Financial Firms, "Financial Management 27, 70-91.
9. Campa, J.M. and S. Kedia, 2002, "Explaining the Diversification Discount, "Journal of Finance 57, 1731-1762.
10. Carter, D.A., D.A. Rogers, and B.J. Simkins, 2006, "Does Hedging Affect Firm Value? Evidence from the U.S. Airline Industry, "Financial Management 35, 53-86.
11. Chen, G.M., M. Firth, Y. Xin, and L. Xu, 2008, "Control Transfers, Privatization, and Corporate Performance: Efficiency Gains in China's Listed Companies, "Journal of Financial and Quantitative Analysis 43, 161-190.
12. Chen, K.C.W. and H.Q. Yuan, 2004, "Earnings Management and Capital Resource Allocation: Evidence from China's Accounting-Based Regulation of Rights Issues, "Accounting Review 79, 645-665.
13. Chung, K. and S. Pruitt, 1994, "A Simple Approximation of Tobin's Q, "Financial Management 23, 70-74.
14. Coles, J.L., N.D. Daniel, and L. Naveen, 2008, "Boards: Does One Size Fit All? Journal of Financial Economics 87, 329-356.
15. Daines, R., 2001, "Does Delaware Law Improve Firm Value? Journal of Financial Economics 62, 525-558.
16. DeMarzo, P. and D. Duffie, 1991, "Corporate Financial Hedging with Proprietary Information, "Journal of Economic Theory 53, 261-286.
17. Doherty, N.A., 1997, "Corporate Insurance: Competition from Capital Markets and Financial Institutions, "Assurances 65, 63-94.
18. Fan, J.P.H., T.J. Wong, and T. Zhang, 2007, "Politically Connected CEOs, Corporate Governance, and Post-IPO Performance of China's Newly Partially Privatized Firms, "Journal of Financial Economics 84, 330-357.
19. Froot, K.A., D.S. Scharfstein, and J.C. Stein, 1993, "Risk Management: Coordinating Corporate Investment and Financing Policies, "Journal of Finance 48, 1629-1658.
20. Géczy, C., B.A. Minton, and C.M. Schr2007, "Taking a View: Corporate Speculation, Governance, and Compensation, "Journal of Finance 62, 2405-2443.
21. Gompers, P., J. Ishii, and A. Metrick, 2003, "Corporate Governance and Equity Prices, "Quarterly Journal of Economics 118, 107-155.
22. Graham, J.R., 1996a, "Debt and the Marginal Tax Rate, "Journal of Financial Economics 41, 41-75.
23. Graham, J.R., 1996b, "Proxies for the Corporate Marginal Tax Rate, "Journal of Financial Economics 42, 187-221.
24. Graham, J.R. and D.A. Rogers, 2002, "Do Firms Hedge in Response to Tax Incentives? Journal of Finance 57, 815-838.
25. Guay, W. and S.P. Kothari, 2003, "How Much Do Firms Hedge with Derivatives? Journal of Financial Economics 70, 423-461.
26. Han, L.M., 1996, "Managerial Compensation and Corporate Demand for Insurance, "Journal of Risk and Insurance 63, 381-404.
27. Hoyt, R.E. and H. Khang, 2000, "On the Demand for Corporate Property Insurance, "Journal of Risk and Insurance 67, 91-107.
28. Jaccard, J., R. Turrisi, and C.K. Wan, 1990, Interaction Effects in Multiple Regression (Sage Paper Series on Quantitative Applications in the Social Sciences: 07-069), Newbury Park, CA, Sage.
29. Jin, Y. and P. Jorion, 2006, "Firm Value and Hedging: Evidence from U.S. Oil and Gas Producers, "Journal of Finance 61, 893-919.
30. Lang, L.H.P. and R.M. Stulz, 1994, "Tobin's Q, Corporate Diversification and Firm Performance, "Journal of Political Economy 102, 1248-1280.
31. LelH.E., 1998, "Agency Costs, Risk Management, and Capital Structure, "Journal of Finance 53, 1213-1243.
32. Lin, B.J., C. Pantzalis, and J.C. Park, 2007, "Corporate Use of Derivatives and Excess Value of Diversification, "Journal of Banking and Finance 31, 889-913.
33. Lookman, A.A., 2005, "Does Hedging Increase Firm Value? Comparing Premia for Hedging 'Big' versus 'Small' Risks, "Carnegie Mellon University Working Paper.
34. Mackay, P. and S.B. Moeller, 2007, "The Value of Corporate Risk Management, "Journal of Finance 62, 1379-1419.
35. MacMinn, R.D., 1987, "Insurance and Corporate Risk Management, "Journal of Risk and Insurance 54, 658-677.
36. MacMinn, R.D. and J. Garven, 2000, "On Corporate Insurance, "in G. Dionne, Ed. Handbook of Insurance, Norwell, MA, Kluwer Academic Publishers.
37. Mayers, D. and C.W. Smith, 1982, "On the Corporate Demand for Insurance, "Journal of Business 55, 281-296.
38. Mayers, D. and C.W. Smith, 1987, "Corporate Insurance and the Underinvestment Problem, "Journal of Risk and Insurance 54, 45-54.
39. Mayers, D. and C.W. Smith, 1990, "On the Corporate Demand for Insurance: Evidence from the Reinsurance Market, "Journal of Business 63, 19-40.
40. Meulbroek, L.K., 2001, "The Efficiency of Equity-Linked Compensation: Understanding the Full Cost of Awarding Executive Stock Options, "Financial Management 30, 5-44.
41. Nelson, J.M., J.S. Moffitt, and J. Affleck-Graves, 2005, "The Impact of Hedging on the Market Value of Equity, "Journal of Corporate Finance 11, 851-881.
42. Nini, G., D.C. Smith, and A. Sufi, 2009, "Creditor Control Rights and Firm Investment Policy, "Journal of Financial Economics 92, 400-420.
43. Petersen, M.A., 2009, "Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches, "Review of Financial Studies 22, 435-480.
44. Petersen, M.A. and S.R. Thiagarajan, 2000, "Risk Measurement and Hedging: With and without Derivatives, "Financial Management 29, 5-29.
45. Purnanandam, A.K., 2008, "Financial Distress and Corporate Risk Management: Theory and Evidence, "Journal of Financial Economics 87, 706-739.
46. Regan, L. and Y. Hur, 2007, "On the Corporate Demand for Insurance: The Case of Korean Nonfinancial Firms, "Journal of Risk and Insurance 74, 829-850.
47. Skipper, H.D., 1998, International Risk and Insurance: An Environmental-Managerial Approach, Boston, MA, Irwin/McGraw-Hill.
48. Smith, C.W. and R.M. Stulz, 1985, "The Determinants of Firm's Hedging Policies, "Journal of Financial and Quantitative Analysis 20, 391-405.
49. Sun, Q. and W.H.S. Tong, 2003, "China Share Issue Privatization: The Extent of its Success, "Journal of Financial Economics 70, 183-222.
50. Tufano, P., 1996, "Who Manages Risk? An Empirical Examination of Risk Management Practices in the Gold Mining Industry, "Journal of Finance 51, 1097-1137.
51. Tufano, P., 1998, "Agency Costs of Corporate Risk Management, "Financial Management 27, 67-77.
52. Vaughan, E.J., 1997, Risk Management, New York, John Wiley.
53. Villalonga, B. and A. Raphael, 2006, "How Do Family Ownership, Control and Management Affect Firm Value? Journal of Financial Economics 80, 386-417.
54. Yamori, N., 1999, "An Empirical Investigation of the Japanese Corporate Demand for Insurance, "Journal of Risk and Insurance 66, 239-252.
55. Zhou, X.M., 2001, "Understanding the Determinants of Managerial Ownership and the Link between Ownership and Performance: Comment, "Journal of Financial Economics 62, 559-571.
56. Zou, H. and M.B. Adams, 2006, "The Corporate Purchase of Property Insurance: Chinese Evidence, "Journal of Financial Intermediation 15, 165-196.
57. Zou, H. and M.B. Adams, 2008, "Debt Capacity, Cost of Debt and Corporate Insurance, "Journal of Financial and Quantitative Analysis 43, 433-466.
58. Zou, H., M.B. Adams, and M.J. Buckle, 2003, "Corporate Risks and Property Insurance: Evidence from the People's Republic of China, "Journal of Risk and Insurance 70, 289-314.