Does the Use of Foreign Currency Derivatives Affect Firms' Market Value? Evidence from Colombia

Jose Gomez-Gonzalez, Carlos León and Karen Juliet Leiton Rodríguez

Emerging Markets Finance and Trade, 2012, vol. 48, issue 4, 50-66

Abstract: This study tests the effects of risk management and hedging decisions on firms' market value. Using information on Colombian nonfinancial firms and the locale's most liquid derivatives market, we find that for a panel of eighty-one large Colombian corporations the growth rate of Tobin's q depends significantly on a firm's size and hedging. Our results suggest that an increase in hedging leads to a higher growth in the firms' value.

Keywords: emerging market; firm value; hedging; Modigliani-Miller; risk management; Tobin's q. (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://mesharpe.metapress.com/link.asp?target=contribution&id=P77U235011785112 (text/html)
Access to full text is restricted to subscribers.

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:mes:emfitr:v:48:y:2012:i:4:p:50-66

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().