This study examines the managerial power-hypothesis of selective hedging, which holds that selective hedging is observed more frequently in companies where managers have greater latitude to execute hedging proposals without serious scrutiny or questioning. The hypothesis is tested using...

This study tests if managerial preferences explain how firms hedge, i.e. how they choose between linear contracts and put options, and if they finance these hedging positions with cash-on-hand or by selling upside (call options). Using hand-collected data on derivative portfolios we characterize...

Combining databases with unique strengths I show that stray firms, i.e. those lacking a controlling owner, have lower disclosure in financial reports. This finding illustrates managers' preference to withhold information (“the fundamental agency problem”). I contribute to the literature by...