Corporate risk exposures, disclosure, and derivatives use: A longitudinal study

摘要

We conduct firm and industry-level examinations of key market risk exposures deemed material by managers over the period 2002-2016. We find that risk exposures have expanded in line with firms' growth and globalization and that managers strategically select disclosure formats in recognition of firms' demand for capital market access and need to protect proprietary information. Currency derivatives use has surpassed that of interest rate derivatives and, conditioned on a firm having the associated risk exposure, commodity derivatives use is the highest. Finally, we find large increases in risk exposures concurrent with the initiation of derivatives use.