Cash Hedging in a Supply Chain
研究了供应链中企业用内部资金对冲现金流风险以提升生产效率，分析了市场大小、现金流波动和相关性如何影响企业的对冲选择。
We study hedging cash-flow risks in a supply chain where firms invest internal funds to improve production efficiencies. We offer a decomposition framework to capture the cost-reduction and flexibility effect of hedging. It allows us to understand how a firm’s hedging choice depends on its supply chain partner’s decision, and how such interaction is affected by supply chain characteristics such as market size, cash-flow volatility, and correlation. When firms’ cash flows are independent of each other, they are more likely to hedge with a larger market size. When cash flows are correlated, the impact of market size and volatility on firms’ hedging decisions presents multiple patterns, contingent on whether their risks amplify or offset each other. This paper was accepted by Gustavo Manso, finance.