Analysis On Influencing Factors Of Hedging Effect Bases On The Case Comparison Study

The risk of business operations are related to the income of investors and the healthy development of society,and is a hot concern to the public and the government.However,in recent years,companies have used the multiple events that caused huge losses due to "hedging" to avoid business risks,which has caused public concerns about the incentives for companies to use derivative financial instruments.Based on the characteristics of the leverage of derivative financial instruments,scholars believe that the high leverage of the capital market is the main incentive for companies to use hedging for hedging.Therefore,the theory focuses on how a hedging affects the enterprise's risk.The current research is more based on the impact of the enterprise's use of hedging on the value of the enterprise,focusing on the significance of seeking the enterprise's use of hedging from the result of the enterprise's use of hedging.However,the huge losses caused by the use of hedging by enterprises originate from the motivations for enterprises to use derivative financial instruments.Based on the perspectives of executives and internal governance of the important management foundation inside the company and the macro perspective of the external management foundation of the company,the reasons for the use of hedging by enterprises are discussed based in the case comparison sudy.Questions may help companies make decisions about derivative financial instruments such as hedging and avoid corporate risks.This article takes a typical company engaged in hedging from 2016 to 2018 as a case,and builds a theoretical analysis framework to study the influencing factors of enterprises using derivatives for hedging based on risk management theory,principal-agent theory and hedging theory.Taking this as a starting point,the following aspects are empirically investigated:i)what is the impact of the enterprise's use of hedging on the enterprise's risk;ii)what factors affect the effect of hedging on corporate risk.The results show that:i)enterprises are using hedging to avoid corporate risks,but in the actual operation process,there will be deviations because using hedging help some companies avoid risks but aggravates some companies' risks;ii)the external macro environment,the degree of corporate governance and the financial background of senior management will all have the effects of hedging.Among them,the favorable external macro environment,good corporate governance and financial background of executives have a positive impact on corporate hedging and help companies avoid risks;executive stickiness of remuneration has a negative impact on corporate hedging,excessive Executive compensation stickiness will increase the risk of hedging to companies.