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The Impact of Financial Derivatives on Economic Growth: Implications for Financial Risk Management

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Proceedings of the 4th International Conference on Economic Management and Green Development

Part of the book series: Applied Economics and Policy Studies ((AEPS))

Abstract

Derivatives market is important to many aspects of the financial system and the economy, but only limited research has shed light on its relationship to economic growth, let alone any studies that consider the influence of risk measures. Based on 32 quarters (2012Q3 to 2020Q2) of data from six countries and taking risk factors into account, this paper uses a panel vector autoregression to investigate the dynamic causality between economic growth and the financial derivatives market. The results indicate that there is significant unidirectional relationship from the factors of financial markets to the economic growth. Meanwhile, the results show that trade openness and inflation also have significant positive effects on economic growth. However, to investigate how risk factors, for instance, volatility and value at risk, would affect the model, further methodology needs to be introduced.

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Authors and Affiliations

  1. Birkbeck College, University of London, Malet Street, Bloomsbury, London, WC17HX, UK

    Weiting Liu

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  1. Weiting Liu
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Editor information

Editors and Affiliations

  1. School of Economics and Management, Beijing University of Posts and Telecommunications, Beijing, China

    Chunhui Yuan

  2. Department of Postal Management, Beijing University of Posts and Telecommunications, Beijing, China

    Xiaolong Li

  3. Supply Chain Management, University of Arkansas, Fayetteville, AR, USA

    John Kent

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Liu, W. (2021). The Impact of Financial Derivatives on Economic Growth: Implications for Financial Risk Management. In: Yuan, C., Li, X., Kent, J. (eds) Proceedings of the 4th International Conference on Economic Management and Green Development. Applied Economics and Policy Studies. Springer, Singapore. https://doi.org/10.1007/978-981-16-5359-9_30

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