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| Author: | Adam, T.R. |
| Title: | Do firms use derivatives to reduce their dependence on external capital markets? |
| Journal: | European Finance Review
2002 : VOL. 6:2, p. 163-187 |
| Index terms: | Financial risk Financing Gold mining industry Hedging Investment |
| Language: | eng |
| Abstract: | It is investigated in this study if the use of derivatives by corporations is likely to affect their financing strategies. A strong positive relation is found between the minimum revenue guaranteed by hedging and investment expenditures. This implies that hedging increases the likelihood that investments can be financed internally. It is also found that companies tend to finance their investment expenditures externally rather than internally. |
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