Corporate Hedging and Shareholder Value

@article{Aretz2009CorporateHA,
  title={Corporate Hedging and Shareholder Value},
  author={Kevin Aretz and S{\"o}hnke M. Bartram},
  journal={Financial Accounting},
  year={2009}
}
According to financial theory, corporate hedging can increase shareholder value in the presence of capital market imperfections such as direct and indirect costs of financial distress, costly external financing, and taxes. This paper presents a comprehensive review of the extensive existing empirical literature that has tested these theories, documenting overall mixed empirical support for rationales of hedging with derivatives at the firm level. While various empirical challenges and… 

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