Do firms hedge in response to tax incentives?

被引:409
作者
Graham, JR [1 ]
Rogers, DA
机构
[1] Duke Univ, Durham, NC 27706 USA
[2] Portland State Univ, Portland, OR 97207 USA
关键词
D O I
10.1111/1540-6261.00443
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
There are two tax incentives for corporations to hedge: to increase debt capacity and interest tax deductions, and to reduce expected tax liability if the tax function is convex. We test whether these incentives affect the extent of corporate hedging with derivatives. Using an explicit measure of tax function convexity, we find no evidence that firms hedge in response to tax convexity. Our analysis does, however, indicate that firms hedge to increase debt capacity, with increased tax benefits averaging 1.1 percent of firm value. Our results also indicate that firms hedge because of expected financial distress costs and firm size.
引用
收藏
页码:815 / 839
页数:25
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