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Hedging Disclosure and its impact on firm’s value

Rahmat, Nur Diana and Hoffmann, Kilian (2011)
Department of Business Administration
Abstract
Previous empirical research has developed many theoretical frameworks to explain the motives behind risk management and provide evidence that hedging does add value to the firm. However, the effect of disclosure on firm value has often been researched separately and the effect of hedging disclosure on the hedging premium is still largely untested today. This provides us with an opportunity to bring these two areas together, adding on to prior research undertaken within these fields. This paper aims to bridge the theoretical gap between the risk management and transparency research by testing if risk management disclosure has an effect on the hedging premium. We use foreign exchange risk as a proxy for risk management in line with previous... (More)
Previous empirical research has developed many theoretical frameworks to explain the motives behind risk management and provide evidence that hedging does add value to the firm. However, the effect of disclosure on firm value has often been researched separately and the effect of hedging disclosure on the hedging premium is still largely untested today. This provides us with an opportunity to bring these two areas together, adding on to prior research undertaken within these fields. This paper aims to bridge the theoretical gap between the risk management and transparency research by testing if risk management disclosure has an effect on the hedging premium. We use foreign exchange risk as a proxy for risk management in line with previous research. Our sample consists of 193 non-financial Swedish firms listed on the Stockholm Stock Exchange in 2009 from which 115 were classified as Hedger and assessed for their disclosure according to IFRS criteria as well as additional criteria defined to identify good disclosure company. (Less)
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author
Rahmat, Nur Diana and Hoffmann, Kilian
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
Hedging premium, Foreign Exchange exposures, Sweden, IFRS, Disclosure, Management of enterprises, Företagsledning, management
language
Swedish
id
1977505
date added to LUP
2011-06-01
date last changed
2012-04-02 18:50:16
@misc{1977505,
  abstract     = {Previous empirical research has developed many theoretical frameworks to explain the motives behind risk management and provide evidence that hedging does add value to the firm. However, the effect of disclosure on firm value has often been researched separately and the effect of hedging disclosure on the hedging premium is still largely untested today. This provides us with an opportunity to bring these two areas together, adding on to prior research undertaken within these fields. This paper aims to bridge the theoretical gap between the risk management and transparency research by testing if risk management disclosure has an effect on the hedging premium. We use foreign exchange risk as a proxy for risk management in line with previous research. Our sample consists of 193 non-financial Swedish firms listed on the Stockholm Stock Exchange in 2009 from which 115 were classified as Hedger and assessed for their disclosure according to IFRS criteria as well as additional criteria defined to identify good disclosure company.},
  author       = {Rahmat, Nur Diana and Hoffmann, Kilian},
  keyword      = {Hedging premium,Foreign Exchange exposures,Sweden,IFRS,Disclosure,Management of enterprises,Företagsledning, management},
  language     = {swe},
  note         = {Student Paper},
  title        = {Hedging Disclosure and its impact on firm’s value},
  year         = {2011},
}