Corpus ID: 159401350

Determinants of Financial Derivative Usage: Empirical Evidence from the Perspective of Governance Structure

@article{Chen2018DeterminantsOF,
  title={Determinants of Financial Derivative Usage: Empirical Evidence from the Perspective of Governance Structure},
  author={Jeffrey Chen and Yunmin Guan},
  journal={Review of Economics and Finance},
  year={2018},
  volume={13},
  pages={14-28}
}
By examining the use of derivatives in a sample of US firms, this paper studies the relationship between the structure of corporate governance, including both bondholder rights and shareholder rights, and managerial hedging decision. We detect a significant association between the hedging decision and governance structure after controlling for well-documented rationales in the prior literature. As one of the first papers, we recognize the impact of bondholder rights on risk management. Our… Expand

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