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Effective derivative hedging and initial public offering long-run performance

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  • Hoa Nguyen
  • Ming-Hua Liu
  • David Gallagher

Abstract

type="main" xml:id="acfi12036-abs-0001"> We investigate the role of corporate currency risk management through the use of financial derivatives in influencing the long-run performance of a sample of Australian resources companies. We find that derivative users generally outperformed nonderivative users in the 5-year period following listing. Effective derivative users consistently outperformed the nonhedgers. Furthermore, within the population of derivative users, effective derivative users tended to perform better than ineffective hedgers. Our results indicate that effective financial risk management plays a role in long-run IPO performance.

Suggested Citation

  • Hoa Nguyen & Ming-Hua Liu & David Gallagher, 2014. "Effective derivative hedging and initial public offering long-run performance," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 54(4), pages 1263-1294, December.
    • Handle: RePEc:bla:acctfi:v:54:y:2014:i:4:p:1263-1294
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    File URL: http://hdl.handle.net/10.1111/acfi.2014.54.issue-4
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    Cited by:

    1. Robert W Faff & Stephen Gray & Kelvin Jui Keng Tan, 2016. "A contemporary view of corporate finance theory, empirical evidence and practice," Australian Journal of Management, Australian School of Business, vol. 41(4), pages 662-686, November.

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