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Record W195446995 · doi:10.1080/13518470110071218a

UK corporate use of derivatives

2003· article· en· W195446995 on OpenAlex

Why this work is in the frame

A frame that forgets how it found something cannot be audited. These are the routes that admitted this work.

aboutThe title or abstract carries a Canadian signal from the geographic lexicon.
no affNo Canadian affiliation: this work is invisible to an affiliation-only frame.
No Canadian affiliation. An affiliation-only frame, the usual design, would never have seen this work. It is one of the works that make the case for inverting the frame.

Bibliographic record

VenueEuropean Journal of Finance · 2003
Typearticle
Languageen
FieldBusiness, Management and Accounting
TopicRisk Management in Financial Firms
Canadian institutionsnot available
Fundersnot available
KeywordsDerivative (finance)Risk managementBusinessAccountingValue (mathematics)Actuarial scienceDerivatives marketValue propositionEconomicsFinanceMarketingComputer science

Abstract

fetched live from OpenAlex

The recent, and ongoing, large losses on derivatives transactions announced by UK corporates and the ensuing fears for systemic risk, highlight the need for focused research on derivative practices and corporate risk management activity in particular. This paper provides a descriptive analysis of the derivative practices of UK non-financial institutions, and attempts to evaluate whether these practices are consistent with value maximizing behaviour. Starting from the basic Modigliani and Miller Capital Structure proposition, more recent academic works on the subject are reviewed and analysed in the light of market Imperfections. Unlike previously published UK based research, this study encompasses a broad spectrum of both derivative instruments and companies surveyed, and offers a wider picture of derivative activity. The paper starts with an analysis of potential benefits and pitfalls of derivative instruments in risk management. The results of a survey, sent to 629 of the 637 corporates listed in the FTSE actuaries as of 1 April 1998 are discussed and compared to existing surveys which report mainly from North American markets. As a whole, the derivatives activity of UK corporates appears to be fairly similar to that of Canadian and US firms, but is still limited in view of the potential benefits that can be derived from their use in risk management. Small firms in particular do not seem to take advantage of the products available to manage their exposure to financial price risks, and initial findings suggest that this is because of a lack of knowledge in derivatives. The results support a positive relationship between derivative usage and firm size and a strong positive correlation between interest rate derivatives usage and firm size. Results also confirm that a significant proportion of firms appear to take unnecessary chances on financial markets using derivatives, although as expected, UK corporates do not use equity derivatives. Finally, although large firms seem to have adopted fairly consistent practices towards derivatives’ risk management; smaller firms have a far less consistent approach. Indeed, a significant number of them also do not appear to report their activity to the board of directors, and/or do not have a policy covering the use of these instruments.

Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.

Full frame distilled prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.

metaresearch head score (Codex)0.001
metaresearch head score (Gemma)0.001
Version: codex-gemma-dda1882f352aValidation status: machine_predicted_unvalidated
Candidate categoriesnone
Consensus categoriesnone
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Not applicable · Consensus signal: none
GenreCandidate signal: Empirical · Consensus signal: Empirical
Teacher disagreement score0.589
Threshold uncertainty score0.497

Codex and Gemma teacher scores by category

CategoryCodexGemma
Metaresearch0.0010.001
Meta-epidemiology (narrow)0.0000.000
Meta-epidemiology (broad)0.0000.000
Bibliometrics0.0000.001
Science and technology studies0.0000.000
Scholarly communication0.0000.001
Open science0.0000.000
Research integrity0.0000.000
Insufficient payload (model declined to judge)0.0000.000

Machine scores (provisional)

The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.

Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.

Opus teacher head0.061
GPT teacher head0.210
Teacher spread0.150 · how far apart the two teachers sit on this one work
Validation statusscore_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it