Investment irreversibility, policy uncertainty and hedging strategies

该项目旨在调查企业的财务对冲和生产决策如何减少潜在不稳定监管政策造成的冲击，特别是当投资在很大程度上是不可逆转的。不稳定的监管政策会对经济产生冲击，但联合对冲和生产决策比单独使用金融对冲来平滑冲击更有效。预计监管变化的公司会改变对政策的反应，可能会降低这些政策的有效性。该项目对澳大利亚矿业和能源行业的调查应该提供对公司对冲行为的理解，并可能对政策设计产生影响。

This project aims to investigate how firms’ financial hedging and production decisions reduce shocks caused by potentially unstable regulatory policies, particularly when the investments are largely irreversible. Unstable regulatory policies induce shocks to the economy, but a joint hedging and production decision is more effective than using financial hedging alone to smooth shocks. Firms that anticipate regulatory change alter their responses to policies, potentially rendering those policies less effective. This project’s investigation of Australian mining and energy industries should provide understanding of firms’ hedging behaviour and could have implications for the design of policy.