Suryalekshmi S, Vinod M
Abstract: The derivatives market is a financial market for derivatives, such as futures contracts or options which are financial products generated from other assets. It has a direct impact on the financial system and makes significant contributions to numerous parts of the economy as a whole. However, due to a lack of supporting facts, a controversy about its influence on economic development has erupted. In the light of this scenario, this study analyses the dynamic relationship between the financial derivative markets and economic development in selected countries (India, China, Japan & USA). All the data required for this study have been obtained mainly from secondary sources. Information on the derivatives market is collected from Bank for International Settlements (BIS) database and data of other variables used in this study is obtained mainly from International Financial Statistics (IFS). A Granger causality test is performed to find the influence of the derivatives market on economic development. The study will be a guiding tool for the investors and researchers who is interested to look onto the derivative markets in present and future.