CORPORATE DERIVATIVES USE AND FIRM VALUE: EVIDENCE FROM PAKISTAN STOCK EXCHANGE

The interlocking of various economies has made it indispensable to cover individual exposures, including commodity prices, currency, and interest rate exposures. Corporate derivatives offer a way out of this situation and allow businesses to cope by entering into derivative contracts. The aim is to investigate the relationship between derivatives use and firm value. A sample of 219 non-financial listed companies from 2011-2019 is chosen. The study revealed that managers use derivatives for speculation, thus having an inverse impact on firm market performance. The firm's specific factors including firm size, age, leverage, liquidity, cash flow and capital expenditure have also significant effect of firm value