Hedging, Financing, and Investment Decisions: An Empirical Analysis
| Autor: | Mei-Hsiang Chang, 張美香 |
|---|---|
| Rok vydání: | 2008 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 97 This study of this paper mainly discusses the relation and influencing factors of the implementation of hedging, financing, and investment decisions for the firms listed on Taiwan stock Exchange and over the counter exchange companies. We classify company size by market value and total book value, and use Fixed Effects Model and Simultaneous Equations Model for empirical analysis. The data study is from year 2004 to year 2007, and focus on all industries of Taiwan’s public companies, but not banks, insurance companies, securities companies, and those companies who do not entirely disclose financial information. The final samples are 1,180 companies with 4,423 observation items. The empirical study shows that hedging, financing, and investment will surely influence each other. No matter what company sizes are, and no matter the using of Fixed Effects Model or Simultaneous Equations Model, we receive the same of result: The more investment, the higher leverage. The higher liability ratio, the higher investment involves. The higher leverage, the hedging method will be adopted. The more cash flow, the more investment occurs. Using Simultaneous Equations Model without considering what company size, we receive the same result: Company uses hedging to increase leverage. Company size and financial decision show a negative effect. Company size and hedging decision show a positive effect. Asymmetric information and hedging decision show a positive effect. In addition, regarding to investment and hedging relation, there will have inconsistency on empirical result if we adopt different models and companies sizes. On Simultaneous Equations Model without considering company size, the more hedging, the higher investment decision. As considering total assets of a company, a large-size company shows few hedging, but higher investment. A middle or small-size company shows more hedging and investment. Besides, a large-size company investing less will have more hedging. The small-size company investing more will have more hedging. Therefore, the study shows that a large-size company does not emphasize hedging while investment. Considering the total assets value under the Simultaneous Equations Model for firms with different growth opportunities, we receive the results of hedging: the high-growing and a large or middle-size company uses hedging to increase leverage. The low-growing and small-size company also uses hedging to increase leverage. And the high-growing and small-size company uses hedging to increase investment level. We are supposed that low-growing company uses hedging to increase leverage level, and high-growing company use hedging to increase investment. However, this empirical study indicated the opposite result to our assumption. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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