Note(s): This table reports the cross-sectional variations in the effect of financial reporting on corporate hedging activities. The dependent variable is the hedging intensity. EQs are financial reporting quality measures, with higher values in EQs indicating lower financial reporting quality. The partitioning variable is E-index. E-index is a score evaluating the provisions on classified boards, limiting the ability to amend bylaws, limit ability to amend charters, majority vote requirements, golden parachutes and poison pills (Bebchuk et al., 2009). We partition the sample in a year into two subsets and assign the indicator variable high to be one when the firm is classified as having better governance, i.e. the negative E-index is larger than the annual median. The model includes industry (based on the Fama and French 48 industry classification) and year fixed effects. t-statistics are reported in parentheses and are based on standard errors adjusted for clustering at the firm and year level. ***, ** and * indicate significance levels of 1, 5 and 10%, respectively

Source(s): The authors