Working Capital Management, the Credit Crisis, and Hedging Strategies: Canadian Evidence
34 Pages Posted: 26 Feb 2015
Date Written: February 20, 2015
This study uses a sample of Canadian natural resource firms during the global financial crisis (GFC) of 2007-2008 to examine the influence of firm hedging strategies on their working capital management. Our evidence implies that increased cash holdings and derivatives are alternative ways of hedging risk, and also provides another perspective on the U.S. “trapped cash” controversy since our sample firms are not R&D intensive and do not face the same tax regime as U.S. multinationals.
Keywords: Credit crisis, working capital, hedging, derivatives, Canada
JEL Classification: G32
Suggested Citation: Suggested Citation