Do derivatives affect the use of external financing?

We examine whether derivatives use reduces the utilization of external financing for a large sample of nonfinancial firms over the period 2002 to 2004. Using the measures of net external finance as discussed in Bradshaw et al. ( 2006 ), we find a negative association between corporate derivative use...

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Bibliographic Details
Published inApplied economics letters Vol. 19; no. 12; pp. 1149 - 1152
Main Authors DaDalt, Peter J., Lin, Bing-Xuan, Lin, Chen-Miao
Format Journal Article
LanguageEnglish
Published London Taylor & Francis 01.08.2012
Taylor and Francis Journals
Taylor & Francis LLC
SeriesApplied Economics Letters
Subjects
Capital structure
Correlation analysis
Debt financing
Derivatives
Economic analysis
Equity financing
External financing
Financial services
financing policy
Risk management
Studies
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Summary:We examine whether derivatives use reduces the utilization of external financing for a large sample of nonfinancial firms over the period 2002 to 2004. Using the measures of net external finance as discussed in Bradshaw et al. ( 2006 ), we find a negative association between corporate derivative use and the use of external financing. Further, we find the relationship is driven by differences in the use of debt, as opposed to equity financing.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:1350-4851
1466-4291
DOI:10.1080/13504851.2011.617677