European Academic Research ISSN 2286-4822
ISSN-L 2286-4822
Impact Factor: 3.4546 (UIF)
DRJI Value : 5.9 (B+)
Article Details :
Article Name :
Factors Determining the Use of Financial Derivatives by Selected Banks Listed on the Ghana Stock Exchange
Author Name :
Sandra Asantewa Ampofo, Evans Opoku-Mensah, Ewurabena Aniniwaa Darkwah
Publisher :
Bridge Center
Article URL :
Abstract :
This paper examines the factors that influence the use of financial derivatives by selected banks listed on the Ghana Stock Exchange (GSE). Using data selected from seven banks for the period 2007 – 2014, two key hypotheses were tested: firm size hypothesis (FSH) and financial distress hypothesis (FDH). The study finds that the factors that influence the use of financial derivatives in Ghana banks are bank size, financial distress indicators such as return on equity, current ratio and interest cover ratio. We, however, found that debt to equity has no significant effect on the use of financial derivatives. We argue that the insignificant relationship could be attributed to the fact that debt to equity is not a good measure of a bank’s debt level.
Keywords :
Bank Size, Determinants, derivatives, Financial Distress

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