Risk Management and Derivatives Losses Risk Management and Derivatives Losses

By Gabriel Levin-Konigsberg, Hillary Stein, Vicente García Averell, and Calixto López Castañon

This paper examines nonfinancial corporate risk management by studying how the outcomes of previous derivatives positions predict future hedging behavior. For their analysis, the authors focus on nonfinancial firms in Mexico. They construct a novel data set that combines the universe of derivatives transactions in Mexico with international trade transactions and foreign currency borrowing.

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