Dr Guanming He guanming.he@durham.ac.uk
Associate Professor
Firms use derivatives both for hedging and nonhedging purposes. The Statement of Financial Accounting Standards No. 161 (SFAS 161) requires firms to disclose the purposes of their derivatives usage, thereby helping investors to evaluate the effects of derivatives usage on firm performance. Using a hand-collected sample of US listed firms and a difference-in-differences research design, we find that, compared with nonderivative-users, derivative-users compliant with SFAS 161 experience a significantly greater reduction in stock illiquidity and the probability of informed trading in the post-SFAS 161 period, and such impact is evident only for firms with a high degree of investor attention.
Journal Article Type | Article |
---|---|
Acceptance Date | Sep 12, 2021 |
Online Publication Date | Sep 28, 2021 |
Publication Date | 2022-01 |
Deposit Date | Sep 12, 2021 |
Publicly Available Date | Sep 29, 2023 |
Journal | Journal of Futures Markets |
Print ISSN | 0270-7314 |
Publisher | Wiley |
Peer Reviewed | Peer Reviewed |
Volume | 42 |
Issue | 1 |
Pages | 24-60 |
DOI | https://doi.org/10.1002/fut.22275 |
Public URL | https://durham-repository.worktribe.com/output/1250901 |
Accepted Journal Article
(840 Kb)
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Copyright Statement
This is the peer reviewed version of the following article: He, G., Ren, M.H. & Taffler, R. (2022). Do enhanced derivative disclosures work? An informational perspective. Journal of Futures Markets 42(1): 24-60., which has been published in final form at https://doi.org/10.1002/fut.22275. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
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