The Relationship between the Use of Hospitality Firms' Financial Derivatives and Cash Flow/Earnings Volatility

Dong Jin Kim and Woo Gon Kim
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Dong Jin Kim: Department of Food Technology & Food Service Industry, Yeungnam University, South Korea
Woo Gon Kim: Dedman School of Hospitality, College of Business, Florida State University, 288 Champions Way, UCB 4116, Tallahassee, FL 32306, USA

Tourism Economics, 2008, vol. 14, issue 3, 469-482

Abstract: Firms use financial derivative instruments to manage risks. Smoothing cash flows and earnings are an important aspect of financial risk management. This study investigates the use of financial derivatives in the lodging, hotel real-estate investment trusts (REITs) and casino industries. The data for the study were collected from both the Compustat database and firms' Form 10-K filings with the Securities and Exchange Commission (SEC). The findings verify that there are significant differences between financial derivatives users and non-users in terms of financial characteristics, cash flow volatility and earnings volatility.

Keywords: risk management; hedging; derivatives; lodging; casino; REITs (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:14:y:2008:i:3:p:469-482

DOI: 10.5367/000000008785633569

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