6. Conclusions
To the best of our knowledge the existing literature is confined to US markets
and nothing has been done with respect to European derivatives markets. Our paper
investigates the Greek case, the ADEX. In addition to the factors investigated
by Mayhew and Mihov (2004) and Jennings and Starks (1986), we have extended our analysis to include such factors as creditworthiness and managerial characteristics
of firms.
Capital market authorities in setting criteria to be met by candidates for listing their
shares on the stock exchange specify factors of economic and/or accounting
significance. Likewise, the authorities of derivative markets in selecting financial
products for listing use criteria such as volatility and capitalization of the underlying
securities. As is well known the market value of derivative products depends upon the
market value of the underlying products. Similarly, the rate of return on a derivative
product depends upon the rate of return of the underlying security/product. Individual
and institutional investors of derivatives could be hedgers, arbitrageurs or speculators.
All users wish to make a satisfactory rate of return on an asset given its risk class.
From the above discussion and the conclusions of the related literature one might
argue that if good governance is a dimension saught after by the market, in that it
affects firm value, the derivative market authorities might consider incorporating it
into their selection criteria.