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Firm Complexity and FX Derivatives Use

Walter Dolde & Dev R. Mishra

Quarterly Journal of Finance and Accounting2007article
ABDC B
Weight
0.46

What the paper says

We simultaneously test complexity (the degree of information asymmetry) and six other theories of FX derivatives use. Structural equations modeling, a method common in other disciplines but dormant in finance since Titman and Wessels (1988), provides a natural arena for testing multiple theories against each other. We find clear empirical evidence that complexity, managerial options ownership, financial distress, and primitive risk relate to two measures of hedging behavior. Our estimates do not support roles for underinvestment or scale economies in explaining hedging. Our data set comprises all US firms with sales exceeding $1 billion.

15 citations

Cite this paper

@article{walter2007,
  title        = {{Firm Complexity and FX Derivatives Use}},
  author       = {Walter Dolde & Dev R. Mishra},
  journal      = {Quarterly Journal of Finance and Accounting},
  year         = {2007},
}

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Firm Complexity and FX Derivatives Use

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Evidence weight

0.46

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.34 × 0.4 = 0.14
M · momentum0.68 × 0.15 = 0.10
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.