Title

Do derivatives affect the use of external financing?

Document Type

Article

Date of Original Version

8-1-2012

Abstract

We examine whether derivatives use reduces the utilization of external financing for a large sample of nonfinancial firms over the period 2002 to 2004. Using the measures of net external finance as discussed in Bradshaw et al. (2006), we find a negative association between corporate derivative use and the use of external financing. Further, we find the relationship is driven by differences in the use of debt, as opposed to equity financing. © 2012 Copyright Taylor and Francis Group, LLC.

Publication Title

Applied Economics Letters

Volume

19

Issue

12

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