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CEO Entrenchment and Corporate Hedging: Evidence from the Oil and Gas Industry
What are the primary determinants of risk management by firms and what, in particular, is the role of managerial entrenchment and free cash flow agency costs? We examine these issues using a unique dataset with detailed quarterly data on hedging by upstream oil and gas firms during 1996-2008. The extent of risk management (hedging intensity) is positively related to factors that amplify entrenchment and free cash flow agency costs, such as long CEO tenure, high CEO stock ownership, and weak board governance. There is also robust evidence that hedging is motivated by the reduction of financial distress and borrowing costs, and is influenced by both intrinsic cash flow risk and temporary spikes in commodity price volatility. Our analysis presents a comprehensive perspective on the determinants of risk management where the main factors are largely consistent with the predictions of the theoretical literatures on risk management and agency costs..Printed Journal
Ketersediaan
| Call Number | Location | Available |
|---|---|---|
| JFQA4803 | PSB lt.dasar - Pascasarjana | 1 |
| Penerbit | Cambridge: Cambridge University Press |
|---|---|
| Edisi | - |
| Subjek | Risk management Corporate governance Oil and gas industry Managerial entrenchment Free cash flows |
| ISBN/ISSN | - |
| Klasifikasi | - |
| Deskripsi Fisik | - |
| Info Detail Spesifik | - |
| Other Version/Related | Tidak tersedia versi lain |
| Lampiran Berkas | Tidak Ada Data |