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Enterprise risk management in China: the impacts on organisational performance

Author

Listed:
  • Xiang Zou
  • Che Hashim Hassan

Abstract

This paper examines the impacts of enterprise risk management (ERM) on organisational performance in China. By using data gathered from the manufacturing sector, the paper examines the valuation of ERM through its effects on firm cost and efficiency. The empirical evidence shows that ERM can benefit larger size firms with lesser earning variability and higher returns on equity. With fewer insiders, ERM firms can take more systematic risks and gain more benefits from international diversification. The results suggest significant value premiums attached to effective ERM through mitigating firm cost and enhancing firm efficiency. The results also suggest that the strong valuation effects of ERM are associated with cost management, inventory management, asset management and cash flow management.

Suggested Citation

  • Xiang Zou & Che Hashim Hassan, 2017. "Enterprise risk management in China: the impacts on organisational performance," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 10(3), pages 226-239.
    • Handle: RePEc:ids:ijepee:v:10:y:2017:i:3:p:226-239
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    Citations

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    Cited by:

    1. Najat Shakir Mahmood & Elsadig Musa Ahmed, 2023. "Mediating effect of risk management practices in Iraqi private banks financial performance," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(2), pages 358-377, June.
    2. Sorin Gabriel Anton & Anca Elena Afloarei Nucu, 2020. "Enterprise Risk Management: A Literature Review and Agenda for Future Research," JRFM, MDPI, vol. 13(11), pages 1-22, November.
    3. Songling Yang & Muhammad Ishtiaq & Muhammad Anwar, 2018. "Enterprise Risk Management Practices and Firm Performance, the Mediating Role of Competitive Advantage and the Moderating Role of Financial Literacy," JRFM, MDPI, vol. 11(3), pages 1-17, June.

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