The Impact of Regulation on Corporate Hedging Activities and the Response of Corporates ¨C A Preliminary Conceptual Framework

Henok Kifle

Business and Management Research, 2017, vol. 6, issue 4, 1-15

Abstract: Following the financial crisis of 2007/2008 regulators intensified the regulation of financial derivatives through (i) the implementation of the European Markets Infrastructure Directive (EMIR) to increase transparency of over-the-counter (OTC) derivatives and (ii) the implementation of Basel III to increase capital underpinning. Non-financial corporates, who mainly hedge with OTC derivatives, are seeing tendencies of increasing costs and decreasing availability of required OTC derivatives but fail to have a full concept of the impact and possible responses to manage the impact. Also, theoretical research did not consider reguation as an influencing factor and thus does not offer theories to analyse the impact of regulation on corporate hedging activities (defined as the willingness and ability of NFCs to conduct hedging in an optimal way). Given this gap, this paper reviews existing theories and based on that pre-conceptualises a model that helps to analyse the impact of regulation on corporate hedging activities and provides a preliminary conceptual framework that includes corporate responses to manage the regulatory impact.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciedupress.com/journal/index.php/bmr/article/download/12267/7673 (application/pdf)
http://www.sciedupress.com/journal/index.php/bmr/article/view/12267 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jfr:bmr111:v:6:y:2017:i:4:p:1-15

Access Statistics for this article

Business and Management Research is currently edited by Simon Lee

More articles in Business and Management Research from Business and Management Research, Sciedu Press
Bibliographic data for series maintained by Simon Lee ().