Corporate financial hedging and firm value: a meta-analysisJerome Geyer-Klingeberg, Markus Hang and Andreas Rathgeber The European Journal of Finance, 2021, vol. 27, issue 6, 461-485 Abstract: This study is a quantitative review of the empirical literature analyzing firm value effects of corporate financial hedging. Using meta-regression analysis to accumulate a hand-collected data set of 1016 estimates for the hedging premium reported in 71 previous studies, we find that reported firm value effects of hedging are systematically larger for foreign exchange hedgers as compared to interest rate and commodity price hedgers, for studies published in lower-ranked journals, and for models estimated without firm fixed effects and without controls for endogeneity. Our results also suggest that hedging premiums increase significantly when a study considers operational hedging strategies in addition to financial hedging. Moreover, we find evidence for a larger hedging premium in less developed financial markets and countries with higher tax rates. Aggregating the previous hedging literature and assuming a ‘best practice’ study design, we find an overall hedging premium of 1.8% for foreign currency hedgers and a firm value discount of −0.8% (−0.6%) for interest rate (commodity price) hedgers. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:eurjfi:v:27:y:2021:i:6:p:461-485 Ordering information: This journal article can be ordered from DOI: 10.1080/1351847X.2020.1816559 Access Statistics for this article The European Journal of Finance is currently edited by Chris Adcock More articles in The European Journal of Finance from Taylor & Francis Journals |
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