Derivatives Use and Analysts' Earnings Forecast Accuracy

Mefteh, Salma; Boubaker, Sabri; Labégorre, Florence

Mefteh, Salma; Boubaker, Sabri; Labégorre, Florence (2012), Derivatives Use and Analysts' Earnings Forecast Accuracy, Frontiers in finance and economics, 9, 1, p. 51-86

Type

Article accepté pour publication ou publié

Date

2012-04

Nom de la revue

Frontiers in finance and economics

Volume

Numéro

Éditeur

International Society Intercommunication of New Ideas

Pages

51-86

Métadonnées

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Auteur(s)

Mefteh, Salma
Boubaker, Sabri
Labégorre, Florence

Résumé (EN)

This paper examines whether the use of derivatives improves firms' information environment, which is a relatively under-investigated research area in risk management literature. Using a sample of French non-financial listed firms, we show that firms which use derivatives enjoy high levels of forecast accuracy relative to firms that do not. This result is in accord with the arguments developed by DeMarzo and Duffie (1995) and Breeden and Vishwanathan (1998) suggesting that hedging is an important means of reducing information asymmetry.