We aim to investigate the impact of the Enterprise Risk Management (ERM) on the enterprise value and to discover the determinants of this adoption. Several economic actors have decided to face the current economic and financial complexity shifting from a Traditional silo-based Risk Management approach (TRM) to a more comprehensive one: the ERM. Some academics have investigated this topic, focusing mainly on the financial industry, but results are still controversial. In this study we try to understand if the ERM implementation affects firm value on a sample of 200 European companies, both financial and non-financial; second, we test which are the determinants of the ERM adoption. We do this through a FE panel regression analysis and a FE logistic analysis. We find a positive statistically significant relation between the ERM adoption and firm value. As for the probability that a firm engages in an ERM protocol, size, beta and profitability are the statistically significant determinants.

The effect of the enterprise risk management implementation on the firm value of European companies

BERTINETTI, Giorgio Stefano;CAVEZZALI, Elisa;GARDENAL, Gloria
2013

Abstract

We aim to investigate the impact of the Enterprise Risk Management (ERM) on the enterprise value and to discover the determinants of this adoption. Several economic actors have decided to face the current economic and financial complexity shifting from a Traditional silo-based Risk Management approach (TRM) to a more comprehensive one: the ERM. Some academics have investigated this topic, focusing mainly on the financial industry, but results are still controversial. In this study we try to understand if the ERM implementation affects firm value on a sample of 200 European companies, both financial and non-financial; second, we test which are the determinants of the ERM adoption. We do this through a FE panel regression analysis and a FE logistic analysis. We find a positive statistically significant relation between the ERM adoption and firm value. As for the probability that a firm engages in an ERM protocol, size, beta and profitability are the statistically significant determinants.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10278/37953
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