Derivatives Usage Research Articles

Impact of Corporate Governance on American Corporates' Financial Performance: The Mediating Role of Derivatives

This study aims to present and test a model that derivatives (commodity, currency, and interest rate) play a mediating role between corporate governance and financial performance. We tested this model through a sample of 85 non-financial American corporates listed in New York Stock Exchange, U.S. 100 Index for six years from 2009-2014 by applying Partial Least Square, Structural Equation Modeling. We confirm that derivatives usage plays a mediating role between corporate governance and financial performance. We found and recommend that the utilization of derivatives as a risk management tool is essential for corporates to improve financial performance. Finally, the findings are useful for corporates from developed (European), emerging (China), and developing (Pakistan, Bangladesh) countries to utilize derivatives to hedge risk and improve financial performance.

Design of functional textile coatings via non-conventional electrofluidodynamic processes

HypothesisIn the last years, several cost-effective technologies have been investigated to functionalize textile substrates for large scale applications and industrial production. However, several limitations of currently used technologies still restrict the capability to form functional coatings finely controlling the textile surface properties and topographic structure of the coatings at sub-micrometric scale. ExperimentsHerein, we introduced a new non-conventional electrofluidodynamic technology – based on the use of electrostatic forces to polymer/composite solutions – for the application onto textile fabrics of functional coatings. With respect to particle/fibrous coatings usually applied through conventional electrospraying/electrospinning processes, the proposed approach is able to realize homogeneous and continuous coatings by a one-step process, imparting tailored functionalities to the textiles surfaces through the use of customized experimental setups. FindingsWe proved that this process can be successfully used to realize functional coatings based on a bioderived polymer, namely polylactic acid (PLA), on commercial woven polyamide (PA) fabrics. In addition, due to the usage of graphene derivatives or photochromic dyes in combination with PLA, the applied coatings are able to confer peculiar functionalities (i.e., electrical conductivity, photochromic properties, etc.) to polyamide fabrics, as proved by SEM, conductivity and UV irradiation measurements, for innovative applications in smart textiles, e-health and wearable electronics.

Does the usage of financial derivatives decrease the systemic risks in the GCC banks An empirical study

In the financial markets, the financial institutions and banks use the financial derivatives for hedging against systemic risks, for speculation or/and arbitrage. This study aims to investigate mainly whether the use of financial derivatives makes banks reducing their systemic risks. Using the data of 19 commercial banks from GCC during the period from 2000 to 2013, the main results reveal that the use of financial derivatives decrease banks systemic risks, while the performance indexes effect is not obvious, it differs between a negative and a positive effect. However, banks use derivatives with the increase in off-balance sheet to hedge their risks. Finally, the rise of GDP does not give a safety feeling to managers of banks, so they tend to use derivatives to hedge, in addition, they use them also with the increase in inflation and unemployment rates for hedging purposes.

Does the usage of financial derivatives decrease the systemic risks in the GCC banks An empirical study

In the financial markets, the financial institutions and banks use the financial derivatives for hedging against systemic risks, for speculation or/and arbitrage. This study aims to investigate mainly whether the use of financial derivatives makes banks reducing their systemic risks. Using the data of 19 commercial banks from GCC during the period from 2000 to 2013, the main results reveal that the use of financial derivatives decrease banks systemic risks, while the performance indexes effect is not obvious, it differs between a negative and a positive effect. However, banks use derivatives with the increase in off-balance sheet to hedge their risks. Finally, the rise of GDP does not give a safety feeling to managers of banks, so they tend to use derivatives to hedge, in addition, they use them also with the increase in inflation and unemployment rates for hedging purposes.

Unobserved Performance of Hedge Funds

We investigate hedge fund firms’ unobserved performance (UP), measured as the risk-adjusted return difference between a fund firm’s reported return and hypothetical portfolio return derived from its disclosed long equity holdings. Fund firms with high UP outperform those with low UP by 7.2% p.a. after accounting for typical hedge fund risk factors. In a horse-race, UP better forecasts fund performance than other predictors. We find that UP is positively associated with a fund firm’s intraquarter trading in equity positions, derivatives usage, short selling, and confidential holdings. UP exhibits significant persistence but investors do not yet use it for manager selection.

Risk Exposition of Prices in Agricultural Commodities Using Options and Futures

Changes and fluctuations in commodity prices exert different effects on value chain participants, depending on the position they have in the chain. Agricultural commodities are exposed to a set of different factors influencing the prices of the commodities. They are influenced by the season, weather shocks, demand and supply forces, household income, tastes and preferences of the consumers. Observing the most recent history, high price fluctuations have been observed during the financial crisis in 2008. One out of many approaches for hedging the price risk is the usage of financial derivatives. This study will be concerned with the volatility modelling methods with the help of futures and options for corn and soya. Methods used for modelling the volatility are GARCH and Black Scholes Implied Volatility. The simplest method in ARCH family, namely the GARCH (1,1) method will be used for modelling volatility based on the historical futures data dating back to 2005. The implied volatility is derived solving back the Black – Scholes Model, only this time looking for sigma. The sole purpose of the thesis is to examine which of the two methods has a better predictive power. Model comparison is done with the help of forecast regression models. The regression models have shown the difficulty in assessing which model has more accurate predictive power. The Adjusted R2 for both models in both cases is relatively low. However, the GARCH (1,1) model has slightly higher values for this indicator. Even the GARCH (1,1) model has shown a better performance, due to the relatively low adjusted R2 values, no stable conclusion regarding the model performance can be derived.

Corporate Hedging, Information Environment, and Stock Price Crash Risk

This study investigates the effect of corporate derivatives usage on stock price crash risk. We test two competing hypotheses. Under the transparency hypothesis, derivatives usage reduces information opacity and lowers crash risk. Under the speculation hypothesis, derivatives usage exacerbates managerial short-termism and increases crash risk. We find evidence supporting the transparency hypothesis. This result is robust to sensitivity checks including a two-stage treatment model, difference-in-differences test, and subsample analysis. We further show that curbing bad news hoarding, curtailing overinvestment, and increasing breadth of ownership are potential channels through which derivatives usage mitigates crash risk. Additional tests on the effect of derivatives usage on likelihood of securities class-action litigation provide consistent results.

Recent Advances of Water-Soluble Fullerene Derivatives in Biomedical Applications

Fullerenes, especially C60, exhibit great potential applications in biology field, due to their excellent antibacterial, antiviral, antitumor and other properties. Many water-soluble fullerene derivatives have been designed, synthesized and used as photo-dynamic therapy agents, antiviral agents, bioimaging agents, drug carriers and so on. This review focuses on the usage of water-soluble fullerene derivatives in biomedical field in recent years. The first half gives the preparation of water-soluble fullerene derivatives themselves with covalent bonds and non-covalent bonds. In the second half, myriad applications of water-soluble fullerene derivatives in biomedical field are introduced.

Exchange rate fluctuations and firm value: impact of global financial crisis

PurposeThe purpose of this paper is to examine the presence of exchange rate exposure and its relationship with currency derivatives usage in the dynamic environment of the global financial crisis of 2008.Design/methodology/approachUsing a sample of 624 Indian firms over the period of April 2001–March 2016, this paper investigates the linear and asymmetric exposure by dividing the full sample period into different sub-periods around the crisis.FindingsThe evidence presented in the paper suggests that the firms are more exposed to the exchange rate changes since the onset of the financial crisis. However, there is a lack of evidence that the usage of currency derivatives is more effective in reducing exposure during the crisis/post-crisis period as opposed to the pre-crisis period.Practical implicationsThe findings are important to investors and managers for a better understanding of firm behaviours in relation to their risk management policies during the period of external shocks like crisis.Originality/valueThere is a paucity of research to explore whether the effect of currency derivatives usage on exchange rate exposure varies during external shocks such as crisis periods. The paper provides novel evidence that the effectiveness of derivatives usage in alleviating exposure becomes less during the dynamic environment of crisis.

Acridone derivatives as high performance visible light photoinitiators for cationic and radical photosensitive resins for 3D printing technology and for low migration photopolymer property

This paper is devoted to study two acridone derivatives (A-2DPA and A-2PTz). These acridone compounds are synthesized and proposed as high performance visible light photoinitiators, in the presence of an iodonium salt or/and an amine (NPG or EDB), for both the free radical polymerization of (meth)acrylates and the cationic polymerization of epoxides upon irradiation with LED@405 nm. Excellent polymerization initiating abilities are found, and high final monomer conversions are obtained. A full picture of the involved photochemical mechanisms is provided. This paper is also concerned with the use of these acridone-based systems in new 3D printing resins. Finally, the usage of the new acridone derivatives for photopolymers with low migration properties is particularly outlined.

The non-financial determinants of the financial derivatives’ usage within SME businesses in Pakistan

It had been acknowledged that the usage of financial derivatives improved the financial performance of the firms despite larger and smaller firms. Sufficient studies had been conducted on larger firms but there was a paucity of literature on financial derivatives’ usage within SMEs in the context of Pakistan. This gap created thirst for the current research in exploring the financial determinants of the financial derivatives’ usage within SMEs. This research was directed by pursuing the research problem: “how and why the financial determinants of the financial derivatives’ usage could be established within SMEs in Pakistan?” A qualitative research was conducted in order to explore this research issue. Respondents of this research were identified by applying snowballing sampling technique. Total twenty (20) convergent interviews were conducted to establish the literature and to confirm the financial determinants of the financial derivatives’ usage within SMEs. Thematic analysis technique was used to analyze the data. The outcomes of this research confirmed twelve (12) financial determinants of the financial derivatives’ usage, i.e. firm size, leverage, exchange rate exposure, interest rate exposure, liquidity, cash flow volatility, financial distress cost, reduction in taxes, firm value, agency cost, reduction in overall cost and un-invested cash. Two newly discovered financial determinants of the financial derivatives’ usage were reduction in cost and un-invested cash, which revealed the current research contribution to the existing body of knowledge. Moreover, this research provided theoretical, methodological, practical and policy implications. This research built a revised theoretical framework, which provided ground for future research.

UV-spectrophotometric study of the 7-((3-thio-4-R-1,2,4-triazole-3-yl)methyl)-theophyllines

Chemistry of the 1,2,4-triazole derivatives recently attracts the attention of many scientists, mainly due to the presence of the number of the valuable pharmacological properties. In modern medical practice, there are many examples of successful heterocyclic systems derivatives usage. First of all, it is a group of drugs with antifungal activity (fluconazole, itraconazole, voriconazole, pozakonazol), antidepressant activity (alprazolam, triazolam), anticancer activity (anastrozole, letrozole). But despite the great practical importance of works in this area, the structure of 1,2,4-triazoles-3-thione derivatives have been studied imperfectly. Therefore, the study of this class of compounds is actual now.
 The aim of this work was to study the UV-spectra of the research compounds in different polarity solvents (water, 95% ethanol, 0,1 M and 1 M sodium hydroxide, 0,1 M and 1 M hydrochloric acid, 0,1 M and 1 M sulfate acid solution, chloroform, isopropanol, acetonitrile and dioxane) for structure–spectral data relationship establishing.
 Spectrophotometer SPECORD 200-222U214 was used to study the UV-spectra of the analyzed compounds and to measure their intensity.
 During the research, it was found that the electronic spectra of 7-((3-thio-4-methyl-1,2,4-triazoles-5-yl)methyl)theophylline, 7-((3-thio-4-ethyl-1,2,4-triazolе-5-yl)methyl)theophylline and 7-((3-thio-4-phenyl-1,2,4-triazolе-5-yl)methyl)-theophylline were characterized by maximums in the short-wave (203–235 nm) and medium-wavе part (250–272 nm) of UV-spectrum.
 Due to the presence of the methylene fragment in investigated molecules, which connects the purine cycle with 1,2,4-triazole, absorbtion maximums were caused by π→π*-electron jumping of the corresponding type 1La and 1Lb.

Do Auditors Charge a Risk Premium? Evidence from the Association between Derivative Hedging and Audit Fees

Prior literature finds that auditors charge higher fees for riskier clients. One reason for this is that auditors expend greater audit effort on riskier clients. However, it is unclear whether they also charge an additional client business risk premium. We investigate this issue employing a detailed, hand-collected dataset of hedging derivative usage by U.S. oil and gas exploration and production firms. Even though the auditing of derivative instruments requires greater auditor effort, hedging significantly reduces client business risk. Consistent with the presence of a client business risk premium in audit fees that gets attenuated when clients reduce their risks by employing derivative hedging, we find a negative association between audit fees and the extent of derivative hedging by clients. Further underscoring the role of risk reduction in this relationship, we find the above negative association to be weaker when the risk management efficacy of derivative instruments is comparatively lower. This negative association is also weaker when effort expended in auditing derivatives is likely to be especially high. We contribute to the literature by providing strong evidence for the presence of a client business risk premium in audit fees.

Preparation and characterization of natural rosin stabilized nanoparticles via miniemulsion polymerization and their pressure-sensitive adhesive applications

A series of rosin stabilized nanoparticles were prepared by miniemulsion polymerization. The hydrophobicity of dehydroabietic acid (DA) from rosin or from DA derived acrylic monomer (AEDA) was employed to stabilize the monomer miniemulsions. Then miniemulsion polymerizations of these monomer miniemulsions were performed separately and achieved the rosin stabilized nanoparticles with a near-monodisperse spherical morphology, respectively. This approach can effectively incorporate DA or AEDA into polyacrylate miniemulsion. Herein, AEDA played a role as both costabilizer and reactant in miniemulsion polymerization, and high molecular weight AEDA-MMA copolymers were achieved. The introduction of rosin’s moiety also could afford its copolymers with an improved thermal stability and mechanical property. Unlike conventional usage of rosin derivatives as a tackifying resin in pressure-sensitive adhesives (PSA), AEDA served as a hard component and improved the holding power of PSA, which opens a new platform for the using of rosin.

Corporate Derivatives and Ownership Concentration: Empirical Evidence of Non-Financial Firms Listed on Pakistan Stock Exchange

Risk management has been gaining tremendous fame for the last couple of years. Firms in developed and developing countries are facing a variety of risks, i.e., foreign exchange risk, interest rate risk, commodity price risk, and equity risk. It calls for such hedging techniques that mitigate this risk level, thus, allowing corporations to enjoy a solid return. This paper draws attention to a new determinant of hedging, i.e., the role of ownership concentration in risk management using derivative instruments. For this purpose, a sample data of 101 non-financial firms listed on the Pakistan Stock Exchange (PSX) for six years, ranging from 2010–2016, is used. The Mann-Whitney test for difference in users and no-users is applied along with logistic regression to check the effect of ownership concentration on derivative usage. The finding of this study reveals that concentrated owners are less likely to use derivatives for hedging purposes due to concentrated owners’ interests (top five shareholders & largest shareholder, family owners). Whereas, executives are more likely to engage in the use of derivatives to increase the value of their stocks. However, associated companies are significantly less involved in hedging activities. These results are extremely advantageous for policymakers in corporations to create a more stable corporate environment.

Properties of Aerial Lime-Based Mortars with Chitosan Ethers

This paper studies the possibility of usage of chitosan derivatives (hydroxypropyl chitosan (HPCH) and carboxymethyl chitosan (CMCH)) as admixtures for aerial lime-based mortars. The physical-mechanical properties were studied on the specimens prepared with constant water/binder ratio and binder/aggregate ratio 1:3 by weight using siliceous sand with the grain size up to 4 mm and doses of admixture ranging between 0.5 and 10‰. The properties were studied on the specimens up to 365 days. The addition of admixtures improves workability of mortar, but in the early stages also decreases strengths of mortars, especially the compressive strength. The addition of HPCH significantly reduces the bulk densities of specimens, while CMCH decreases them just slightly. With the increasing amount of time, the difference in strengths between reference and tested mortars decreases, reaching the similar values after 90 days of curing time. The further ageing causes additional growth of strengths with a significantly higher increase in the case of CMCH.

Register variation in spoken British English

AbstractThe aim of this paper is to identify the effect of register variation in spoken British English on the occurrence of the four principal verb-forming suffixes: ‑ate, ‑en, ‑ifyand ‑ize, by building on the work ofBiber et al. (1999),Plag et al. (1999)andSchmid (2011). Register variation effects were compared between the less formal Demographically-Sampled and the more formal Context-Governed components of the original 1994 version of the British National Corpus. The pattern of ‑izederivatives revealed the most marked register-based differences with respect to frequency counts and the creation of neologisms, whereas ‑enderivatives varied the least compared with the other three suffixes. Quantitative and qualitative analyses of these suffix profiles in the context of spoken language reveal markers of register formality that have not hitherto been explored; derivative usage patterns provide an additional dimension to previous research on register variation which has mainly focused on grammatical and lexical features of language.

Sulfur dioxide derivatives alleviate cadmium toxicity by enhancing antioxidant defence and reducing Cd2+ uptake and translocation in foxtail millet seedlings

Sulfur dioxide (SO2) was recently proposed as a novel bio-regulator in mammals. However, the possible advantageous effects of SO2 in plant adaptation to heavy metal-contaminated environments are largely unknown. In the present study, using Na2SO3/NaHSO3 derivatives as SO2 donors, we investigated the possible roles and regulation mechanisms of SO2 in alleviating Cd2+ toxicity in foxtail millet seedlings. Exogenous SO2 derivatives (0.5 mM) application significantly reduced the seedling growth inhibition caused by Cd2+ stress. Cd2+-induced oxidative damage was also alleviated by SO2 derivatives, which was supported by the decreased malondialdehyde (MDA) level in the leaves of seedlings pretreated with SO2 derivatives. These responses were related to the enhanced activities of representative antioxidant enzymes, including catalase and superoxide dismutase, as well as the up-regulation of ascorbate-glutathione cycle, which contributed to the scavenging of Cd2+-elicited O2•－ and H2O2 within the leaves of foxtail millet seedlings. Also, SO2 derivative application promoted sulfur assimilation and increased the content of glutathione and phytochelatins, which may help to enhance Cd2+ detoxification capacity in foxtail millet seedlings. Moreover, application of SO2 derivatives caused down-regulation of the transcript expression levels of several genes involved in Cd2+ uptake and translocation, such as NRAMP1, NRAMP6, IRT1, IRT2, HMA2, and HMA4, thus resulting in reduced Cd2+ accumulation in the shoots and roots of Cd2+-stressed seedlings. Collectively, these results suggest that exogenous SO2 derivative application can alleviate oxidative damage and restrict Cd2+ buildup, thereby reducing Cd2+-induced growth inhibition in foxtail millet seedlings upon Cd2+ exposure. This novel finding indicates that the usage of SO2 derivatives may be an effective approach for enhancing Cd2+ tolerance in foxtail millet and other crops.

J. S. Mill’s hedonism: activism, experientialism and eudaimonism

ABSTRACTMany contemporary scholars defend the position that J. S. Mill was a ‘eudaimonist’, in a sense implying that he was not an ‘experiential’ hedonist. One ‘activist’ argument for this interpretation rests on the claim that Mill’s core axiological uses of ‘pleasure’ in Utilitarianism should be understood to refer to worthy or pleasurable activities rather than mental states. This paper offers a three-stage rebuttal of the activist interpretation. Firstly, in the Analysis, the Examination and the Logic, Mill explicitly identifies pleasures and pains as mental states. Secondly, if we read Mill’s core axiological uses of ‘pleasure’ in Utilitarianism along activist lines, the text’s overall coherence and intelligibility becomes even more questionable than on the traditional experientialist reading. Finally, in his discussions of Plato, Mill seems to distance himself from the axiological view that non-hedonic features of mind or character have intrinsic value in their own right. In consequence, in the small number of cases in Utilitarianism in which Mill clearly speaks of ‘pleasures’ as activities, this is best construed as a derivative usage.

Does hedging enhance firm value in good and bad times

PurposeThe purpose of this paper is to examine if the hedging strategy of the firm adds value to the firm, and if so, is the source of the benefit consistent with the hedging theory?Design/methodology/approachThe paper used data from 129 top non-financial Indian companies spanning a period of 2008-2015 and analyzed using the ordinary least squares regression technique.FindingsThe study finds that firms engaged in hedging compared to non-hedgers have less volatility in the firm’s value. The use of hedging during the financial crisis is found to be value enhancing for the hedgers. The results also found that some firms do not disclose the notional value of derivatives clearly, which highlights the need of clear regulation for derivative declaration in the annual reports.Research limitations/implicationsResearch implications of this study are to gain an insight into the hedging effectiveness in the highly volatile Indian market as compared to developed countries. High volatility in the exchange rate of Indian rupee further makes it one of the most relevant markets to study the effect of hedging on the firm’s value.Practical implicationsMostly hedging is done purely for risk management, and if managers try to time the market by selective hedging, it can bring a negative impact for the firm. Findings show that managers should manage their hedging strategy based on changing the economic environment and not purely on the firms’ financial value.Originality/valueTo the authors’ best knowledge, this is the first study to extract the dollar value of derivative usage of sample firms and analyze its effectiveness in enhancing firm value in the presence of other financial parameters. This will be an advancement of previous studies, which used hedging as a dummy variable only. Most studies on this topic are carried out in developed countries; there is a limited research on developing markets such as India, and past studies have been more generic one like determinants of hedging and overall derivative scenario.