Risk Management and Firm Value: Evidence from Weather Derivatives
利用天气衍生品引入作为外生冲击，发现对冲天气风险能提升企业估值、投资和杠杆，证明风险管理对企业有实际影响。
ABSTRACT This paper shows that active risk management policies lead to an increase in firm value. To identify the effect of hedging and to overcome endogeneity concerns, we exploit the introduction of weather derivatives as an exogenous shock to firms’ ability to hedge weather risks. This innovation disproportionately benefits weather‐sensitive firms, irrespective of their future investment opportunities. Using this natural experiment and data from energy firms, we find that derivatives lead to higher valuations, investments, and leverage. Overall, our results demonstrate that risk management has real consequences on firm outcomes.