Determinants and Value of Enterprise Risk Management: Empirical Evidence from Germany

31 Pages Posted: 21 Feb 2016 Last revised: 26 Apr 2016

See all articles by Philipp Lechner

Philipp Lechner

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Nadine Gatzert

Friedrich-Alexander University Erlangen-Nürnberg

Date Written: March 17, 2016

Abstract

Enterprise risk management (ERM) has become increasingly relevant in recent years, especially due to an increasing complexity of risks and the further development of regulatory frameworks. The aim of this paper is to empirically analyze firm characteristics that determine the implementation of an ERM system and to study the impact of ERM on firm value. We focus on companies listed at the German stock exchange, which to the best of our knowledge is the first empirical study with a cross-sectional analysis for a European country. Our findings show that size, international diversification, and the industry sector (banking, insurance, energy) positively impact the implementation of an ERM system. In addition, our results confirm a significant positive impact of ERM on shareholder value.

Keywords: Enterprise risk management, firm characteristics, shareholder value

JEL Classification: G20, G22, G32

Suggested Citation

Lechner, Philipp and Gatzert, Nadine, Determinants and Value of Enterprise Risk Management: Empirical Evidence from Germany (March 17, 2016). Available at SSRN: https://ssrn.com/abstract=2735050 or http://dx.doi.org/10.2139/ssrn.2735050

Philipp Lechner

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Lange Gasse 20
Nuremberg, DE 90403
Germany
+49911530296391 (Phone)
+499115302888 (Fax)

HOME PAGE: http://www.vwrm.rw.fau.de

Nadine Gatzert (Contact Author)

Friedrich-Alexander University Erlangen-Nürnberg ( email )

Lange Gasse 20
Nuremberg, 90403
Germany
+499115302884 (Phone)
+499115302888 (Fax)

HOME PAGE: http://www.vwrm.rw.fau.de

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