The propensity to hedge with futures contracts: the case of potato futures contracts

Patricia L. Chelley-Steeley*, Claire Lavers

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

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.

Original languageEnglish
Pages (from-to)2143-2146
Number of pages4
JournalApplied Economics
Volume37
Issue number18
DOIs
Publication statusPublished - Oct 2005

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Hedge
Propensity
Futures contracts
Potato
Tax
Financial distress
Costs
Large firms

Keywords

  • UK non-financial firms
  • potato futures contracts
  • hedge

Cite this

Chelley-Steeley, Patricia L. ; Lavers, Claire. / The propensity to hedge with futures contracts : the case of potato futures contracts. In: Applied Economics. 2005 ; Vol. 37, No. 18. pp. 2143-2146.
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The propensity to hedge with futures contracts : the case of potato futures contracts. / Chelley-Steeley, Patricia L.; Lavers, Claire.

In: Applied Economics, Vol. 37, No. 18, 10.2005, p. 2143-2146.

Research output: Contribution to journalArticle

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