Naslov
Corporate Risk Management Practices: Evidence from Croatian and Slovenian Companies

Autori
Miloš Sprčić, Danijela

Vrsta, podvrsta i kategorija rada
Ocjenski radovi, doktorska disertacija

Fakultet
Greenwich Business School

Mjesto
London, Velika Britanija

Datum
03.05

Godina
2007

Stranica
310

Mentor
Professor Željko Šević, PhD

Ključne riječi
rationales of corporate risk management; risk management strategies and instruments; shareholder maximisation hypothesis; managerial Utility maximisation hypothesis; Croatian and Slovenian non-financial companies

Sažetak
In this thesis the rationales of corporate risk management, as well as the implementation of different risk management strategies and the use of risk management instruments in Croatian and Slovenian companies have been investigated. Based on arguments arising from the review of the literature, we have proposed several hypotheses. We have tested whether the decision to hedge or not, and the decision to hedge with derivatives made by Croatian and Slovenian non-financial companies, is a function of six factors – financial distress costs, agency costs, capital market imperfections and costly external financing, taxes, managerial utility maximisation and hedge substitutes. We have also tested the assumption that corporate risk management is more developed or has different rationales among Slovenian than among Croatian companies. On the basis of our research results, it could be concluded that the explored hedging rationales have little predictive power in explaining corporate risk management decisions both in Croatian and Slovenian companies. The evidence based on univariate and multivariate empirical relations between the decision to hedge or use derivatives in Croatian companies and the predicted theories of hedging fails to provide support for any of the tested hypotheses but one - capital market imperfections and costly external financing. The univariate analysis and multivariate regression conducted for Slovenian companies have revealed that there is no statistically significant explanatory variable for the decision to hedge ; therefore we can conclude it is not dependent on any of the predicted theories of hedging. The decision to use derivatives, however, has been shown as dependent on the size of the company. The multivariate test has proven a positive relation between the use of derivatives and the size of Slovenian companies, which supports the informational and transactional scale economies argument that larger firms will be more likely to use derivatives. The analysis conducted to explore differences between risk management practices in Slovenian and Croatian companies has shown statistically significant evidence that Slovenian companies use all types of derivatives, especially structured derivatives, more intensively than Croatian companies. Additionally, Croatian companies use simple risk management instruments like natural hedging to a greater extent in comparison with Slovenian companies. These findings are consistent with our research prediction that Slovenian companies have more advanced risk management practices than Croatian companies.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA