The objective of this study is to investigate the effectiveness of economic stimulus packages of COVID-19 for small-medium enterprises (SMEs) in Malaysia, specifically on the young entrepreneurs’ age 40 and below to offer some views on financial measures that should be prioritised and strengthened to lessen the burden of those young entrepreneurs who are severely affected during the pandemic. Data collected mainly from the survey of 25 industry players on their views on the Malaysian government’s stimulus packages, announcements and reports. Analysis of the findings serves as the basis for deriving the viewpoints and reflections of this paper. The result shows that most interviewees welcome a six-month wage subsidy program, bank loan instalment moratorium and company tax deferment. Respondents commented that tax incentives on certain expenses are not as beneficial as that spending is luxurious. Feedback shows a delay in receiving the subsidies by some respondents and concerns on their ability to pay tax and loan instalments in the future when the government lifted the incentives as they expect a longer time is needed to boost demand. From the positive impacts, respondents viewed optimistically the Malaysian government’s stimulus packages and complimented that as one of the best government strategies.

In the face of crises such as Covid-19, businesses become devastated by greater risk exposure, particularly in currency exchange, supply chain disruption, and fluctuation in commodity prices that cause volatile earnings trends. Higher earnings volatility is frequently associated with greater risk. Consequently, firms could be inspired to engage in earnings management or derivative use as attempts to mitigate earnings volatility. Using a sample of 169 of the largest non-financial firms with 507 firm-years observations from an emerging market, the researchers examined the relationship among derivative use, earnings volatility, and earnings management. The results of a panel regression analysis showed that derivative use by Malaysian public listed companies was positively connected with earnings volatility, inferring that the use of derivatives did not mitigate earnings volatility as intended. This study also found that both earnings volatility and derivative use have a positive relationship with earnings management. This implies that firms engage in earnings management to curb earnings volatility under circumstances where derivative use is associated with higher earnings volatility. Evidence derived from this study contributes to extant literature on financial risk management involving financial instruments, an area that is very much understudied in the contexts of emerging markets.

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