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A global perspective on the use of derivatives for corporate risk management decisions

Abolhassan Jalilvand (Dean and Professor of Finance, Faculty of Management at Dalhousie University, Halifax, Canada)
Jeannette Switzer (Associate Professor of Finance, Faculty of Management at Dalhousie University, Halifax, Canada)
Caroline Tang (Software project manager at S.I.T.A., Montreal, Canada)

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 March 2000

Abstract

Notes the “spectacular” growth of derivatives over the last 20 years and reviews previous research on the risk management policies and practices of corporations. Reports a survey of leading, non‐financial Canadian firms and compares it with previous studies. Shows the differences between respondents using/not using derivatives, the proportions of different types of treasury organization, the importance attached to treasury benchmarking and the integration of risk management policy with strategic plans. Finds that Canada uses derivatives more than Europe or the USA; that most Canadian and European treasuries operate as cost or service centres but are not benchmarked; that although most Canadian and European companies have written risk management policies, these are not integrated with financial/operating plans; that US risk managers are more likely to take positions reflecting their market views; and that in all the countries covered derivative users are larger than non‐users. Believes that most risk management programmes “remain in an introductory stage”.

Keywords

Citation

Jalilvand, A., Switzer, J. and Tang, C. (2000), "A global perspective on the use of derivatives for corporate risk management decisions", Managerial Finance, Vol. 26 No. 3, pp. 29-38. https://doi.org/10.1108/03074350010766567

Publisher

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MCB UP Ltd

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