Volume 20 No 22 (2022)
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The Effect of Implementing Enterprise Risk Management on the Corporate Value
Abbasali Haghparast, Behroz Mehrparvar i, Seyed Daniyal Aghvami , Samieh Jazinizadeh , Behnoush Shayesteh
Abstract
Enterprise risk management is a relatively new phenomenon, and several studies are still trying to examine how risk management affects corporate decision processing. Enterprise risk management is a systematic and integrated approach to managing the total risks that a company is confronted with. Enterprise risk management is the effort to manage all of a company's risks; organizational risk management has a structural responsibility that helps management achieve its goal - which is to maximize the value of the company's assets. Our goal is to investigate the effect of enterprise risk management (ERM) on organizational value and discover the determinants of this application. According to the enterprise risk management standard, risk management is divided into five sections: identification, analysis, and evaluation, adopting the necessary strategies for risk management, implementation, control, and monitoring, the first two stages of which are discussed here. In this study, we try to understand whether the implementation of ERM affects the financial and non-financial enterprise value of 103 companies listed on the Tehran Stock Exchange; Second, we examine which factors are decisive in using ERM. We did this through the FE panel regression analysis and FE logistics analysis. We found a statistically significant relationship between ERM implementation and organizational value, but in terms of the likelihood of an organization entering the ERM approach, size, beta, and profitability were statistically significant.
Keywords
risk management, enterprise risk, enterprise value, enterprise.
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