Maturity, Speculation and Corporate Hedging: An Empirical Study in Oil and Gas Firms from 2000-2008
In this paper, we develop a new but also under-researched measure for firms’ hedging practice: maturity. Comparison between the outputs of two sets of Tobit model using hedge ratio and maturity respectively shows that the costs of financial distress hypothesis and the financing costs hypothesis are partially supported by both hedge ratio and maturity. Besides, the economies of scale hypothesis rec