Empirical Research On Financial Motives Of The Usage Of Derivatives

The derivatives have been developing rapidly since they were created in the 20th century, especially, while the financial innovation continues the derivatives marker has become an important part of the international financial market. As financial tools, the derivatives provide useful tools for arbitrage and risk management to financial institutions, non-financial companies and other investors, meantime, because of the different kind of risk management needs, the derivatives also could provide effective financial tools for investment management and financing management for companies by using different derivative tools. In recent years, the foreign trade of our country has become much more frequent and the import and export has increased significantly, thus, domestic companies become increasingly dependent on international goods and raw materials and have been faced with the raw material price risk and the foreign exchange risk, therefore, more and more companies use derivatives to hedge market risks, prevent and resolve financial crisis. What's more, while the government gradually liberalizes the regulations on derivatives business, the derivatives would play a significant role in financial management and become a kind of important financial tools for companies.Based on this, this thesis mainly talks about the motives of the using of derivatives, and on the basis of retrospective analysis of the related literature about derivatives, this thesis analyzes the influence to financial management of using derivatives for companies. Then, it describes some rational strategies about how to use derivatives properly and makes a few useful suggestions about how to manage the risk of derivatives for companies.Firstly, this thesis explains financial motives about using of the derivatives from theoretical perspective, focusing on the aspects of firm value, capital cost and the capital structure. Secondly, we select the listed companies in metal and non-metal industry as samples, according to the data which are from these listed companies, we do some positive research about the financial motives of using derivatives by using the logistic regression. We find that the factors of firm value and capital cost have some connection with the using of derivatives, if companies use the derivatives properly, it's helpful in reducing the capital cost and increasing the firm value to some extent. This study also finds that the capital structure and the using of derivatives are not related and the reason is that listed companies in china basically don't use derivatives to improve the capital structure of the firm. Thirdly, based on theoretical and empirical results, the study explains how to strengthen the function of derivatives in asset management and financing management and gives some examples about increasing firm value or deducing the company's financing cost by using different derivatives. Finally, the thesis makes some suggestions about how to use derivatives properly in some aspects, such as specialized operations, risk management systems, internal control mechanisms, information disclosure system and so on, which hopes that the company could use derivatives properly.