The derivative Usage of Listed and Non-Listed Italian Firms for Corporate Risk Management

The scarce disclosure of derivatives usage in financial statements results in little knowledge of firms’ attitudes, policies and patterns with respect to derivative use. This article surveys the otherwise unknown risk management practices of Italian firms, both listed and non-listed, for a broad range of business risks: currency, interest rate, energy, commodity, equity, credit, political and operational risk. By including non-listed firms, this paper upgrades the previous literature in this field. Results indicate listed companies, driven by the experience of managers use more sophisticated contracts, while non listed companies show a stronger attitude to hedge their risks with easier tools in order to reduce the cash flow volatility, the cost of funding, and to optimize the tax exposure.