Derivatives Usage: Value-Adding or Destroying?

Colorado College Working Paper No. 2011-02

11 Pages Posted: 13 Jun 2011  

Jack Naito

affiliation not provided to SSRN

Judith A. Laux

Colorado College - Department of Economics and Business

Date Written: June 13, 2011

Abstract

The following article tests the wealth-building nature of derivatives usage in non-financial firms. Investigating 434 firms and employing univariate and multivariate tests, it uses both the fair values and notional values of firms’ derivatives contracts to determine whether derivatives usage enhances or destroys firm value.

Keywords: Derivatives, risk management, stockholder wealth, agency theory

JEL Classification: G1

Suggested Citation

Naito, Jack and Laux, Judith A., Derivatives Usage: Value-Adding or Destroying? (June 13, 2011). Colorado College Working Paper No. 2011-02. Available at SSRN: https://ssrn.com/abstract=1864034 or http://dx.doi.org/10.2139/ssrn.1864034

Jack Naito

affiliation not provided to SSRN ( email )

Judith A. Laux (Contact Author)

Colorado College - Department of Economics and Business ( email )

14 E Cache La Poudre Street
Colorado Springs, CO 80903
United States
7193896414 (Phone)
7193896927 (Fax)

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