Determinants and Value of Enterprise Risk Management Empirical Evidence from Germany
Journal
Risk Management and Insurance Review
ISSN
1098-1616
Type
journal article
Date Issued
2015
Author(s)
Abstract
The development of an enterprise risk management (ERM) program enables
companies to manage corporate risks in a holistic manner as opposed to the
silo-based perspective in traditional risk management frameworks. One main
question in this regard is what factors drive the implementation of an ERM
system in companies and whether ERM programs can actually create value
once implemented. This article addresses these questions by conducting a com-
parative assessment of empirical evidence from the literature regarding the
determinants of ERM and its value once implemented. In doing so we are able
to illustrate differences in model specifications and the underlying data. Our
literature study shows that particularly the company size and the level of in-
stitutional ownership are significantly positively related to the implementation
of ERM in most empirical studies and, furthermore, that ERM generally has a
(significant) positive impact on corporate value and performance (to a differ-
ent extent and depending on the focus of the studies). However, geographic
and/or industrial restrictions regarding the underlying data sets partly limit
the generalization of the empirical results.
companies to manage corporate risks in a holistic manner as opposed to the
silo-based perspective in traditional risk management frameworks. One main
question in this regard is what factors drive the implementation of an ERM
system in companies and whether ERM programs can actually create value
once implemented. This article addresses these questions by conducting a com-
parative assessment of empirical evidence from the literature regarding the
determinants of ERM and its value once implemented. In doing so we are able
to illustrate differences in model specifications and the underlying data. Our
literature study shows that particularly the company size and the level of in-
stitutional ownership are significantly positively related to the implementation
of ERM in most empirical studies and, furthermore, that ERM generally has a
(significant) positive impact on corporate value and performance (to a differ-
ent extent and depending on the focus of the studies). However, geographic
and/or industrial restrictions regarding the underlying data sets partly limit
the generalization of the empirical results.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Wiley-Blackwell
Volume
18
Number
1
Start page
29
End page
53
Pages
25
Subject(s)
Division(s)
Eprints ID
255444