مقاله انگلیسی رایگان در مورد ترجیحات ریسک پذیری مدیران و تصمیم گیری های مصون – الزویر ۲۰۱۸

Theory suggests that the extent of corporate hedging by managers depends upon the risk preferences of the CEO. Risk seeking CEOs take more risk due to the higher payoff of convex compensation contracts (CEO options) while risk-averse managers are more likely to act conservatively due to the linear payoff of the equity-like (i.e., CEO equity share compensation, CEO inside debt and CEO cash compensation) compensation contracts (Knopf et al. 2002; Smith and Stulz, 1985, Tufano, 1996). On the other hand, Smith and Stulz (1985), argue that derivatives usage is motivated by growth opportunities, reduction in expected taxes or for reducing the probability of financial distress. Despite the large literature on hedging, previous empirical evidence on these hedging explanations has been mixed.1 The inconsistency in the empirical literature about the forces behind corporate hedging could be attributed to several reasons that motivate this study. First, most of the previous studies on the relation between derivatives hedging and managerial compensation, controlling for firm characteristics, perform cross-sectional analyses relying on just one year of data (Knopf et al. 2002; Tufano, 1996). Using a hand collected unique dataset that spans a 5-year period from 2008-2012 period, a comprehensive investigation is conducted on the relation between hedging and managerial risk preferences. This approach permits to draw inferences about the role of managerial risk preferences and hedging over a five-year period rather than relying on 1 year of data. Second, unlike previous studies that have mainly focused on currency hedging, in this paper both currency and non-currency (interest rate and commodity) corporate hedging activities are analyzed since non-FX derivatives constitute more than 50% (see Table 2) of total derivatives used by our sampled firms. Focusing on all derivatives used (foreign exchange, interest rate and commodity) permits to overcome the selection bias likely to be present in studies that focus exclusively on a subset of derivatives used by corporations. Moreover, the exclusion of a subset can influence the statistical significance of the empirical tests or produce distorted results. Third, different from most previous studies that attribute hedging to a number of different factors, in this study, besides the role of managerial risk preferences, managerial past experiences and education are examined as potential influences on corporate hedging decisions.2 One of the main contributions of this paper is that it examines whether CEO characteristics (i.e., risk preferences, education, age, past experiences, and sex) affect hedging decisions after controlling for managerial compensation and firm level characteristics. Since it is the CEO who makes the final decision to hedge or not to hedge, his personal characteristics and past experiences/education may exert considerable influence on corporate hedging. The “Upper Echelon theory” of Hambrick and Mason (1984), which states that firm outcomes can be partially predicted by managerial characteristics, past experiences and values, supports this notion.