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Derivative Usage, Risk Disclosure, and Firm Value

Jankensgård, Håkan LU (2014) In Journal of Accounting and Finance 14(5). p.159-174
Abstract
Risk disclosure is generally regarded as crucial in order for investors to make informed decisions in the resource allocation process. Our study is the first to empirically investigate the value-relevance of corporate risk disclosure. We focus on the disclosure of foreign exchange (FX) risk, which is an activity notorious for its lack of transparency. Our empirical analysis involves a FX risk disclosure index for a sample of 114 Swedish derivative users. Contrary to expectations our results suggest that, holding the level of derivative usage constant, firm value decreases in the level of risk disclosure.
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
in
Journal of Accounting and Finance
volume
14
issue
5
pages
159 - 174
publisher
North American Business Press
ISSN
2158-3625
language
English
LU publication?
yes
id
7ce264c1-1eb4-41ff-b14c-9dc46a94db74 (old id 4064521)
alternative location
http://www.na-businesspress.com/JAF/JankensgardH_Web14_5_.pdf
date added to LUP
2013-09-27 10:57:13
date last changed
2016-04-15 21:18:04
@article{7ce264c1-1eb4-41ff-b14c-9dc46a94db74,
  abstract     = {Risk disclosure is generally regarded as crucial in order for investors to make informed decisions in the resource allocation process. Our study is the first to empirically investigate the value-relevance of corporate risk disclosure. We focus on the disclosure of foreign exchange (FX) risk, which is an activity notorious for its lack of transparency. Our empirical analysis involves a FX risk disclosure index for a sample of 114 Swedish derivative users. Contrary to expectations our results suggest that, holding the level of derivative usage constant, firm value decreases in the level of risk disclosure.},
  author       = {Jankensgård, Håkan},
  issn         = {2158-3625},
  language     = {eng},
  number       = {5},
  pages        = {159--174},
  publisher    = {North American Business Press},
  series       = {Journal of Accounting and Finance},
  title        = {Derivative Usage, Risk Disclosure, and Firm Value},
  volume       = {14},
  year         = {2014},
}