CEO Age, Risk Incentives and Hedging Instrument Choice

Ettore Croci, Håkan Jankensgård

Risultato della ricerca: Contributo in libroContributo a convegno

Abstract

We analyze how managerial risk preferences influence firms’ hedging instrument choice in the oil and gas industry. CEO age determines hedging behaviour: the probability of being a hedger as well as the use of linear hedging strategies decreases with CEO age. These findings are consistent with an argument that financial distress, which sends a negative signal of managerial ability, is relatively more costly to younger CEOs. We also investigate the vega-theory of hedging instrument choice, finding some support for a negative relationship between vega and a) the use of derivatives and b) hedging strategies that include the sale of call options.
Lingua originaleEnglish
Titolo della pubblicazione ospiteN/A
PagineN/A
Stato di pubblicazionePubblicato - 2014
EventoFMA Europe 2014 - Maastricht
Durata: 12 giu 201413 giu 2014

Convegno

ConvegnoFMA Europe 2014
CittàMaastricht
Periodo12/6/1413/6/14

Keywords

  • CEO
  • age
  • hedging policy
  • incentive

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