Are derivatives a frequently used risk management tool in the agribusiness industry?

Translated title of the contribution: Are derivatives a frequently used risk management tool in the agribusiness industry?

Nicolás Magner Pulgar, Jaime Lavín Salazar

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

Empirical evidence indicates that the frequency of using derivatives is less than recommended in financial theory. From a sample of companies in the United States' agribusiness industry (201 firms), 41% of them use derivatives to hedge risk; the larger companies, indebtedness and investment opportunities being those more likely to use these instruments. The main contribution of this paper is to jointly study the determinants of the use of derivatives for hedging, in companies in the agribusiness industry, providing key details to understand the dynamics of financial risk management in this industry.

Translated title of the contributionAre derivatives a frequently used risk management tool in the agribusiness industry?
Original languageEnglish
Pages (from-to)65-78
Number of pages14
JournalAcademia Revista Latinoamericana de Administracion
Issue number51
StatePublished - 2012
Externally publishedYes

Keywords

  • Derivatives
  • Incentives for hedging
  • Risk management

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