The determinants of derivative usage: a study of financial services in Malaysia / Farhana Jainal Ariffin

This paper aims to analyses the relationship between determinants of derivative usage
among financial services in Malaysia. The study used Multiple Linear Regression Model to
determined significant relationship between dependent and independent variables, covering
data for 14 companies with 5 years period which are from 2009 until 2013. The researcher
used five independent variables that affect the derivative usage which are debt, investment
growth, managerial ownership, liquidity and profitability. Debt consists of two proxy
variables which are leverage and debt to equity, investment growth consists of proxy
variables of capital expenditure and dividend payout ratio, managerial ownership with proxy
variable of number of shareholding, liquidity with proxy variables of current ratio and quick
ratio and profitability with proxy variables of return on assets and return on equity. The
empirical results have found there is positively significant relationship between derivative
usage and managerial ownership. The results of the study are valuable for both academic and
investor.