TY - JOUR
T1 - The propensity to hedge with futures contracts
T2 - the case of potato futures contracts
AU - Chelley-Steeley, Patricia L.
AU - Lavers, Claire
PY - 2005/10
Y1 - 2005/10
N2 - This paper studies why UK non-financial firms hedge with potato futures contracts. It is found that the financial characteristics of firms in the sample play an important role in influencing the propensity to hedge. For example, it is found that firms that hedge are on average larger than firms that do not hedge. Firms that hedge also have more volatile earnings. Furthermore, firms that do hedge appear to want to smooth earnings to reduce the costs of financial distress and avoid entering the highest tax threshold. © 2005 Taylor & Francis.
AB - This paper studies why UK non-financial firms hedge with potato futures contracts. It is found that the financial characteristics of firms in the sample play an important role in influencing the propensity to hedge. For example, it is found that firms that hedge are on average larger than firms that do not hedge. Firms that hedge also have more volatile earnings. Furthermore, firms that do hedge appear to want to smooth earnings to reduce the costs of financial distress and avoid entering the highest tax threshold. © 2005 Taylor & Francis.
KW - UK non-financial firms
KW - potato futures contracts
KW - hedge
UR - http://www.scopus.com/inward/record.url?scp=27744565952&partnerID=8YFLogxK
U2 - 10.1080/00036840500278152
DO - 10.1080/00036840500278152
M3 - Article
SN - 0003-6846
VL - 37
SP - 2143
EP - 2146
JO - Applied Economics
JF - Applied Economics
IS - 18
ER -