Does ownership structure matter in explaining derivatives' use policy in French listed firms

Boubaker, Sabri; Mefteh, Salma; Shaikh, Junaid M.

Boubaker, Sabri; Mefteh, Salma; Shaikh, Junaid M. (2010), Does ownership structure matter in explaining derivatives' use policy in French listed firms, International Journal of Managerial and Financial Accounting, 2, 2, p. 196-211. http://dx.doi.org/10.1504/IJMFA.2010.033291

Type

Article accepté pour publication ou publié

Date

2010

Journal name

International Journal of Managerial and Financial Accounting

Volume

Number

Publisher

Inderscience

Pages

196-211

Abstract (EN)

The purpose of this study is to investigate the effect of ownership structure on derivatives' use policy. Using data for 262 French non-financial listed firms, the results show that the two decisions of whether to use derivatives or not and the extent of derivatives use are not affected by the same variables. CEO ownership has a negative effect on the decision to use derivatives, whereas CEO tenure length influences negatively the extent of derivative use. CEO age impacts positively both decisions, whereas firms that grant stock options to their CEOs do not rely too much on derivatives. However, the presence of outside blockholders seems not to affect the firms' hedging policy.

Subjects / Keywords

Derivatives; Derivative use; Corporate governance; CEO ownership; France; Ownership structure; French listed firms; CEO tenure length; CEO age; Stock options; Hedging policy

JEL

G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
M52 - Compensation and Compensation Methods and Their Effects