The Agency Problems of Hedging and Earnings Management*
用委托代理模型研究对冲与盈余管理的互动，发现对冲使盈余管理更难，两者是战略替代品；若对冲决策不可签约，有时不对冲反而更有效，因为激励对冲需要更昂贵的薪酬方案。
This paper uses a principal-agent model to study the interaction between hedging and earnings management. Hedging makes earnings management more difficult and they appear to be strategic substitutes in this model, which is both consistent with existing empirical evidence and provides a new explanation for that evidence. If hedging decision is contractible, hedging is efficient since it reduces both the risk premium and the equilibrium amount of earnings management. If hedging decision is not contractible, however, hedging does not always alleviate the agency problem. Surprisingly, sometimes a scenario of no hedging but allowing earnings management is efficient. The reason is that motivating hedging may require a more costly compensation scheme to mitigate the appeal of earnings management. In addition, this paper shows that tolerating some earnings management is always efficient when there is no hedge option, since it is costly to eliminate earnings management. Sometimes it is inefficient to take any action against earnings management. However, with the encouraged hedge option, the cost to eliminate earnings management can be reduced significantly and zero tolerance of earnings management may be efficient.