This paper examines how a tournament among CEOs to progress within the CEO labor market influences their corporate hedging policies. We employ a textual analysis of 10-Ks to generate corporate hedging proxies, finding that the likelihood and intensity of hedging grow as the CEO labor market tournament prizes increase. We also explore the mitigating impact of corporate hedging on the adverse effects of risk-inducing industry tournament incentives (ITIs) on the cost of debt and stock price crash risk, noting that these could be possible reasons behind the relation. Additionally, we observe that the relationship between ITIs and corporate hedging is less pronounced for firms that demonstrate more financial distress and for firms whose CEOs are the founders of the company or are of retirement age. We identify a causal relation between ITIs and corporate hedging using an instrumental variable approach and an exogenous shock sourced from changes in the enforceability of noncompetition agreements across states.

中文翻译：

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行业赛事激励与企业对冲政策

本文研究了 CEO 之间的竞争如何在 CEO 劳动力市场中取得进展，如何影响他们的公司对冲政策。我们使用 10-K 的文本分析来生成企业对冲代理，发现对冲的可能性和强度随着 CEO 劳动力市场锦标赛奖金的增加而增加。我们还探讨了企业对冲对风险诱导行业锦标赛激励 (ITI) 对债务成本和股价崩盘风险的不利影响的缓解影响，并指出这些可能是这种关系背后的可能原因。此外，我们观察到，对于表现出更多财务困境的公司以及首席执行官是公司创始人或已达到退休年龄的公司，ITI 与公司对冲之间的关系不太明显。