Analysis Of The Status Quo Of Chinese Entities' Use Of Financial Derivatives

With the reform and deepening of China's market economic system reform and opening up,entity enterprises are facing more and more frequent market price fluctuation risks,and the demand for efficient and convenient risk management tools is growing.In order to meet this demand,China has successively opened financial derivatives transactions,and the market transaction volume has grown rapidly.However,in stark contrast to the booming derivatives market,the enthusiasm of Chinese entities to use financial derivatives to hedge risks is not high,and participation is relatively low.This paper starts from the perspectives of the use of financial derivatives to compare the business performance and risk management effects of related entities,and comprehensively uses panel regression,propensity score matching,data statistics,text analysis and other methods to deepen the reasons behind the above phenomena.Explore and then propose corresponding policy recommendations.This paper takes the commodity futures market as an example for analysis.On the one hand,using the panel data of A-share listed companies in China during 2008-2017,through the fixed effect panel regression model and propensity score matching(PSM)model test,it is found that the comprehensive risk management effect of financial hedging is not as diversified in related fields.Enterprises will rationally choose more favorable means to use derivatives less;on the other hand,analyze the costs that enterprises need to pay in the process of using derivatives,and direct costs such as transaction costs,management operating expenses,and policy system restrictions will make some Insufficient companies can't use derivatives,and companies with insufficient direct cost investment are prone to failure,so they can't easily use derivatives,and the indirect costs caused by market failures can lead to enterprise hedging failure or even loss,thus losing the hedging.Confidence,no longer use derivatives.Finally,in order to enable China's derivatives market to better play its risk management function and better serve the real economy,this paper suggests that enterprises should pay more attention to the management operations in the process of derivatives investment,such as establishing strict internal wind control.Outsourcing the hedging business to professional institutions,etc.,and suggesting that the regulatory authorities reduce the transaction costs and institutional restrictions of real enterprises that do hedges,and scientifically control and reasonably prevent the phenomenon of market speculation overheating.