Impacts of Corporate Characteristics and Financial Robustness on Derivative Transactions for Listed Companies of Taiwan

• Main Authors: Yi-Chun Kuo, 郭怡君
• Other Authors: Shi-Miin Liu
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/60352518989437236476

碩士 === 國立臺北大學 === 國際財務金融碩士在職專班 === 97 === The financial tsunami of Wall Street occurred in 2008 has made investors realize again the importance of companies’ risk control and financial robustness. And companies’ usages of financial derivatives are affected by their financial risk conditions. Thus, this study tries to investigate the impacts of corporate characteristics and financial robustness on derivative transactions for listed companies of Taiwan. This research first employs Laitinen & Laitinen’s (1998) cash management model to examine properness of our using 7 criteria to judge 186 sample companies’ financial robustness. Then, derivative operations and basic information of the sample companies are briefly described. Finally, Probit models are adopted to empirically inspect the influences of factors belonging to groups of corporate characteristics, financial risks, investment opportunities, and hedging alternatives on companies’ derivative operations. The major findings of this study are as follows. First, financial robust companies will use derivatives appropriately to hedge their risks, while companies facing financial crises use fewer derivatives due to the lack of liquidity and cash flow. Second, the most commonly used derivatives are forward contracts, especially after the 2007-2008 financial tsunami. Third, some medium-size companies in our sample face no financial risk, and do not use derivatives at all. They are worthy targets of investors.