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Financial constraints, competition and hedging in industry equilibrium

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Financial constraints, competition and hedging in industry equilibrium. / Dasgupta, Sudipto.

In: Journal of Finance, Vol. 62, No. 5, 10.2007, p. 2445-2473.

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Dasgupta, Sudipto. / Financial constraints, competition and hedging in industry equilibrium. In: Journal of Finance. 2007 ; Vol. 62, No. 5. pp. 2445-2473.

Bibtex

@article{d2fe70494f224247a455188a460a1ecd,
title = "Financial constraints, competition and hedging in industry equilibrium",
abstract = "We analyze the hedging decisions of firms, within an equilibrium setting that allows us to examine how a firm's hedging choice depends on the hedging choices of its competitors. Within this equilibrium some firms hedge while others do not, even though all firms are ex ante identical. The fraction of firms that hedge depends on industry characteristics, such as the number of firms in the industry, the elasticity of demand, and the convexity of production costs. Consistent with prior empirical findings, the model predicts that there is more heterogeneity in the decision to hedge in the most competitive industries.",
author = "Sudipto Dasgupta",
year = "2007",
month = oct,
doi = "10.1111/j.1540-6261.2007.01280.x",
language = "English",
volume = "62",
pages = "2445--2473",
journal = "Journal of Finance",
issn = "0022-1082",
publisher = "Wiley-Blackwell",
number = "5",

}

RIS

TY - JOUR

T1 - Financial constraints, competition and hedging in industry equilibrium

AU - Dasgupta, Sudipto

PY - 2007/10

Y1 - 2007/10

N2 - We analyze the hedging decisions of firms, within an equilibrium setting that allows us to examine how a firm's hedging choice depends on the hedging choices of its competitors. Within this equilibrium some firms hedge while others do not, even though all firms are ex ante identical. The fraction of firms that hedge depends on industry characteristics, such as the number of firms in the industry, the elasticity of demand, and the convexity of production costs. Consistent with prior empirical findings, the model predicts that there is more heterogeneity in the decision to hedge in the most competitive industries.

AB - We analyze the hedging decisions of firms, within an equilibrium setting that allows us to examine how a firm's hedging choice depends on the hedging choices of its competitors. Within this equilibrium some firms hedge while others do not, even though all firms are ex ante identical. The fraction of firms that hedge depends on industry characteristics, such as the number of firms in the industry, the elasticity of demand, and the convexity of production costs. Consistent with prior empirical findings, the model predicts that there is more heterogeneity in the decision to hedge in the most competitive industries.

U2 - 10.1111/j.1540-6261.2007.01280.x

DO - 10.1111/j.1540-6261.2007.01280.x

M3 - Journal article

VL - 62

SP - 2445

EP - 2473

JO - Journal of Finance

JF - Journal of Finance

SN - 0022-1082

IS - 5

ER -