Factors affecting the use of derivative financial instruments of listed companies: The case of Hanoi Stock Exchange

Vu, Trong Lam; Le, Cong Thanh; Pham, Ngoc Anh; Tran, Thi Ngoc

doi:10.5267/j.ac.2020.6.002

Cited by 3 publications

(1 citation statement)

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“…One more important concern that needs to be brought into focus is a paucity of qualitative research on CDS. However, a wide collection of notable studies analyzed the use of derivatives and its association with risk management activities through the prism of first‐hand or primary collected data (Bodnar et al., 2008; Brunzell et al., 2011; Bülbül et al., 2019; De Ceuster et al., 2000; Mallin et al., 2001; Vu et al., 2020). Not surprisingly, no study analyzed the qualitative aspect of CDS regarding its usefulness from the perspectives of risk managers, risk analysts, and risk controllers.…”

Section: Discussionmentioning

confidence: 99%

Why do banks use credit default swaps (CDS)? A systematic review

Tabassum

Yameen

2023

Journal of Economic Surveys

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Credit default swaps (CDS)—the fiercely discussed derivatives instrument since the explosion of the recent global credit crunch—are still subject to considerable theoretical and practical debate. More than a decade after significant developments in CDS literature, we currently lack a holistic understanding of the disparate strands of evidence, synthesizing analytical advancements in the field. We, therefore, conducted a systematic review of 143 publications (peer‐reviewed and first‐tier grey literature), focusing on three key areas: CDS characteristics and development, credit risk hedging, and determinants of CDS use, and performed the first bibliometric mapping for CDS. Our review makes the following contributions. First, measuring CDS characteristics and development gives a snapshot of how CDS remained a significant indicator for hedging corporate lending risk. Second, by mapping the research landscape, we provide insights into banks’ use of CDS; in particular, we show that banks use CDS to obtain capital relief, enhance liquidity and profitability, limit credit supply, and consequently mitigate their NPLs’ level. Moreover, the use of CDS by lenders increases firms’ leverage and value. Leaving a fertile area for debates and future research, the outcomes of this review help provide policy guidance to regulators and financial institutions that make informed decisions to use CDS as a credit risk management instrument.

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Section: Discussionmentioning

confidence: 99%

Why do banks use credit default swaps (CDS)? A systematic review

Tabassum

Yameen

2023

Journal of Economic Surveys

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Why Do Investors Trade in Equity Derivatives? A Literature Review

Sanghvi,

Sharma,

Chandani

2024

Vision: The Journal of Business Perspective

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The derivatives market is an important asset class and has been found to positively contribute to economic development. It has sparked interest from researchers, policymakers and financial agencies. This article aims to present a literature review that explains the motive of individual investors to trade in equity derivatives. Studies from 1997 to 2023 were extracted from SCOPUS, Emerald and Web of Science using the keywords, and articles were later refined with their motive, research methodology, source of data, journal, year of publication, country-wise articles published and publication source to explore the opportunities for further research. VOS viewer has been used to visualize the author keyword and link among various keywords. This study reviews 51 articles, which were found relevant and have been segregated theme-wise. The motives of investors are categorized as ‘Hedging vs. speculation’, ‘Return vs. risk’ and ‘Gambling’. The findings of the study show that most of the studies are conducted in the USA using discount house data and most of the articles were published in the Journal of Banking and Finance. The findings of the study will be useful to the researchers, practitioners, stock exchanges and regulators by providing the current landscape of the body in this domain.

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