The influence of product market dynamics on a firm's cash holdings and hedging behavior

• 成果类型: Article
• 署名作者: Haushalter, David; Klasa, Sandy; Maxwell, William F.
• 署名单位: University of Arizona; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2006.05.007
• 发表日期: 2007
• 页码: 797-825
• 关键词: Risk management; Cash holdings; Product market competition

摘要

Prior work suggests that if a firm shares a larger proportion of its growth opportunities with rivals, an inability to fully invest in these opportunities leads to predatory behavior on the part of rivals and losses in market share. We examine whether firms manage this predation risk. We find inter- and intra-industry evidence that the extent of the interdependence of a firm's investment opportunities with rivals is positively associated with its use of derivatives and the size of its cash holdings. Moreover, an analysis of investment behavior provides evidence that if this interdependence is high, the management of predation risk provides strategic benefits. Our results indicate that predation risk is an important determinant of corporate financial policy choices and investment behavior. (c) 2007 Elsevier B.V. All rights reserved.