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The Effect Of Enterprise Risk Management On Firm Performance: A Case Study On Turkey

Author

Listed:
  • ŞENOL, Zekai

    (Cumhuriyet University, Faculty of Economics and Administrative Sciences, Department of Business Administration, Turkey)

  • KARACA, Süleyman Serdar

    (Gaziosmanpaşa University, Faculty of Economics and Administrative Sciences, Department of Business Administration, Turkey)

Abstract

Enterprise Risk Management (ERM) is a risk management process based on all of the risks faced in business and applied entirely by the enterprise. It is also a risk management process that evaluates risk and opportunity together and provides reasonable assurance that the business objectives are realized. This study attempts to determine the effect of ERM on firms’ financial performance and the determinants of ERM. The study sample was prepared by the firms listed in Stock Exchange Istanbul (BIST), within the first 200 of the list of the Top 500 Industrial Enterprises of Turkey which Istanbul Chamber of Industry prepared for 2015. 231 observational values were obtained from a sample of 33 firms in the 2009-2015 period. In panel data analysis, it was seen that the effects of ERM on firm performance were not determined, whereas in the panel logistic regression, firm size was found to be determinant of ERM applications.

Suggested Citation

  • ŞENOL, Zekai & KARACA, Süleyman Serdar, 2017. "The Effect Of Enterprise Risk Management On Firm Performance: A Case Study On Turkey," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 21(2), pages 6-30.
  • Handle: RePEc:vls:finstu:v:21:y:2017:i:2:p:6-30
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    References listed on IDEAS

    as
    1. Eckles, David L. & Hoyt, Robert E. & Miller, Steve M., 2014. "The impact of enterprise risk management on the marginal cost of reducing risk: Evidence from the insurance industry," Journal of Banking & Finance, Elsevier, vol. 43(C), pages 247-261.
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    More about this item

    Keywords

    Risk Management; Financial Performance; Panel Data Analysis; Panel Logistic Regression;

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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