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Industry tournament incentives and corporate hedging policies
dc.contributor.authorLonare, Gunratan
dc.contributor.authorNart, Ahmet
dc.contributor.authorTuncez, Ahmet M.
dc.date.accessioned2022-07-05T21:00:19Z
dc.date.available2023-07-05 17:00:18en
dc.date.available2022-07-05T21:00:19Z
dc.date.issued2022-06
dc.identifier.citationLonare, Gunratan; Nart, Ahmet; Tuncez, Ahmet M. (2022). "Industry tournament incentives and corporate hedging policies." Financial Management 51(2): 399-453.
dc.identifier.issn0046-3892
dc.identifier.issn1755-053X
dc.identifier.urihttps://hdl.handle.net/2027.42/172947
dc.description.abstractThis paper examines how a tournament among CEOs to progress within the CEO labor market influences their corporate hedging policies. We employ a textual analysis of 10-Ks to generate corporate hedging proxies, finding that the likelihood and intensity of hedging grow as the CEO labor market tournament prizes increase. We also explore the mitigating impact of corporate hedging on the adverse effects of risk-inducing industry tournament incentives (ITIs) on the cost of debt and stock price crash risk, noting that these could be possible reasons behind the relation. Additionally, we observe that the relationship between ITIs and corporate hedging is less pronounced for firms that demonstrate more financial distress and for firms whose CEOs are the founders of the company or are of retirement age. We identify a causal relation between ITIs and corporate hedging using an instrumental variable approach and an exogenous shock sourced from changes in the enforceability of noncompetition agreements across states.
dc.publisherWiley Periodicals, Inc.
dc.subject.otherpay gap
dc.subject.otherrisk-taking
dc.subject.othertournament incentives
dc.subject.otherrisk management
dc.subject.othercorporate hedging
dc.subject.otherexecutive compensation
dc.subject.otherFX hedging
dc.titleIndustry tournament incentives and corporate hedging policies
dc.typeArticle
dc.rights.robotsIndexNoFollow
dc.subject.hlbsecondlevelManagement
dc.subject.hlbsecondlevelFinance
dc.subject.hlbtoplevelBusiness and Economics
dc.description.peerreviewedPeer Reviewed
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/172947/1/fima12373.pdf
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/172947/2/fima12373_am.pdf
dc.identifier.doi10.1111/fima.12373
dc.identifier.sourceFinancial Management
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dc.owningcollnameInterdisciplinary and Peer-Reviewed


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