The Impact of Institutional Differences on Derivatives Usage: a Comparative Study of US and Dutch Firms European Financial Management
Vol. 9, No. 3, 2003
Gordon M. Bodnar
Johns Hopkins University
Abe de Jong
Eramus University
and Victor Macrea
Nyenrode University Abstract This paper examines the influence of institutional differences on corporate risk management practices in the USA and the Netherlands. We compare results to surveys in each country using a strategy that corrects for differences over industry and size classes across Dutch and US samples. We document several differences in the firms' use and attitudes towards derivatives and attempt to attribute them to the differences in institutional environments between the USA and the Netherlands. We find that institutional differences do appear to have an important impact on risk management practices and derivatives use across US and Dutch firms.
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