Derivative Financial Instrument Use in Australia

13 Pages Posted: 23 Dec 2002

See all articles by Henk Berkman

Henk Berkman

University of Auckland Business School

Michael E. Bradbury

Unaffiliated Authors

Phil Hancock

University of Western Australia

Clare Innes

Murdoch University

Abstract

This paper examines the relation between derivatives use and financial characteristics of Australian industrial and mining firms. The firm characteristics proxy for financial distress, tax losses, managerial ownership, growth opportunities, the ability to generate operating cash flows and liquidity. We also control for firm size, dividends and exposure to foreign exchange risk. The results show that firm size and leverage are the main explanatory variables for derivative use for both industrial and mining firms.

JEL Classification: G32, G33, H25, M41

Suggested Citation

Berkman, Henk and Bradbury, Michael E. and Hancock, Phil and Innes, Clare, Derivative Financial Instrument Use in Australia. Available at SSRN: https://ssrn.com/abstract=320415

Henk Berkman (Contact Author)

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand
(64 9) 3737599 Ext. 7181 (Phone)
(64 9) 3737406 (Fax)

Michael E. Bradbury

Unaffiliated Authors ( email )

United States

Phil Hancock

University of Western Australia ( email )

Graduate School of Management
35 Stirling Highway
Crawley WA 6009
Australia
61 8 938029129 (Phone)
61 8 9380 1072 (Fax)

Clare Innes

Murdoch University ( email )

School of Commerce
South Street
Murdoch 6150, Western Australia
Australia

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