The DOI matches its Crossref record; 4 of the 4 references it cites were found in a registry or an index.
Risk Management: Coordinating Corporate Investment and Financing Policies
Open accessAbstract
This paper develops a general framework for analyzing corporate risk management policies. We begin by observing that if external sources of finance are more costly to corporations than internally generated funds, there will typically be a benefit to hedging: hedging adds value to the extent that it helps ensure that a corporation has sufficient internal funds available to take advantage of attractive investment opportunities. We then argue that this simple observation has wide-ranging implications for the design of risk management strategies. We delineate how these strategies should depend on such factors as shocks to investment and financing opportunities. We also discuss exchange-rate hedging strategies for multinationals. as well as strategies involving "nonlinear" instruments like options.
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Citations
Cites
Corporate financing and investment decisions when firms have information that investors do not have
Myers, S. C., & Majluf, N. S. (1984) · Journal of Financial Economics · doi:10.1016/0304-405x(84)90023-0 · Cited by 18,957
Financial intermediation and delegated monitoring
Diamond, D. W. (1984) · The Review of Economic Studies · doi:10.2307/2297430 · Cited by 8,476
The Determinants of Capital Structure Choice
TITMAN, S., & WESSELS, R. (1988) · The Journal of Finance · doi:10.1111/j.1540-6261.1988.tb02585.x · Cited by 6,112
Financing Constraints and Corporate Investment
Fazzari, S. M., Hubbard, R. G., Petersen, B. C., Blinder, A. S., & Poterba, J. M. (1988) · Brookings Papers on Economic Activity · doi:10.2307/2534426 · Cited by 5,574
Cited by
The impact of monetary policy on bank balance sheets
Kashyap, A. K., & Stein, J. C. (1995) · Carnegie-Rochester Conference Series on Public Policy · doi:10.1016/0167-2231(95)00032-u · Cited by 1,130
Self-citationThe Strength of Corporate Culture and the Reliability of Firm Performance
Sørensen, J. B. (2002) · Administrative Science Quarterly · doi:10.2307/3094891 · Cited by 1,004
Growing out of trouble? Corporate responses to liability risk
Gormley, T. A., & Matsa, D. A. (2011) · Review of Financial Studies · doi:10.1093/rfs/hhr011 · Cited by 690
Does hedging affect firm value? Evidence from the US airline industry
Carter, D. A., Rogers, D. A., & Simkins, B. J. (2006) · Financial Management · doi:10.1111/j.1755-053x.2006.tb00131.x · Cited by 389
Corporate Environmental Policy and Shareholder Value: Following the Smart Money
Fernando, C. S., Sharfman, M. P., & Uysal, V. B. (2017) · Journal of Financial and Quantitative Analysis · doi:10.1017/s0022109017000680 · Cited by 241
The product market effects of hedge fund activism
Aslan, H., & Kumar, P. (2016) · Journal of Financial Economics · doi:10.1016/j.jfineco.2015.08.016 · Cited by 138
What’s mine is mine and what’s yours is mine: The Dark Triad and gambling with your neighbor’s money
Jones, D. N. (2013) · Journal of Research in Personality · doi:10.1016/j.jrp.2013.04.005 · Cited by 103
Corporate risk management and dividend signaling theory
Dionne, G., & Ouederni, K. (2011) · Finance Research Letters · doi:10.1016/j.frl.2011.05.002 · Cited by 44
Tietjen, O., Lessmann, K., & Pahle, M. (2021) · Resource and Energy Economics · doi:10.1016/j.reseneeco.2020.101214 · Cited by 22
Metadata
- Authors
- Froot, K. A., Scharfstein, D. S., & Stein, J. C.
- Venue
- The Journal of Finance
- Publisher
- JSTOR
- Published
- 1993-12
- Volume
- 48
- Issue
- 5
- Pages
- 1629
- ISSN
- 0022-1082 (ISSN-L)
- OpenAlex
- W2102812912
- Cited by
- 961
- References
- 4
- FWCI
- 18.40
- Type
- journal article
- Language
- en
- Open access
- green
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