What motivates New Zealand firms to use derivative instruments and does their use add value?
|dc.identifier.citation||Reynolds, M. (2003, March 27). What motivates New Zealand firms to use derivative instruments and does their use add value? (Thesis, Master of Commerce). Retrieved from http://hdl.handle.net/10523/1268||en|
|dc.description.abstract||Many firms use derivative instruments as part of their strategic financial management. This study examines the motivations behind New Zealand firms' use of derivative instruments. Using the fair value and contract value amounts it finds that derivatives use increases with the firm size and with the proportion of debt a firm uses. These results are, however, sensitive to the classification of derivative use. Using an alternative classification of derivative use and a binary variable, the results indicate that the likelihood of derivative use increases with the size of the firm and the proportion of debt in a firm's capital structure. There is also mixed evidence to support the idea that derivative use increases with a firm's investment opportunity set. In investigating further the relationship between derivative use and investment this study finds that firms may use derivatives to mitigate the under-investment problem caused by costly external financing. Finally, there is no evidence that derivative use affects the value of a firm as there is no difference between the value of firms that use derivatives and the value of firms that do not.||en_NZ|
|dc.subject||strategic financial management||en_NZ|
|dc.subject||New Zealand firms||en_NZ|
|dc.subject||firm's capital structure||en_NZ|
|dc.subject||Investment Opportunity Set||en_NZ|
|dc.title||What motivates New Zealand firms to use derivative instruments and does their use add value?||en_NZ|
|thesis.degree.name||Master of Commerce|
|thesis.degree.grantor||University of Otago||en_NZ|
|otago.school.eprints||Finance & Quantitative Analysis||en_NZ|
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