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Empirical Examination of Enterprise Risk Management’s Value Creation Mechanism

Lai, Fong-Woon (2015) Empirical Examination of Enterprise Risk Management’s Value Creation Mechanism. [Citation Index Journal]

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Abstract

This paper espouses an enterprise risk management (ERM) implementation framework which encompasses 3 dimensions that comprised of 7 areas, which in turn, made up of 14 elements. This paper also empirically examines the value creation transmission mechanism of ERM implementation. Unlike the neoclassical finance theory, the espoused ERM framework underscores the idea of managing firms’ unsystematic (specific) risk that leads to the enhancement of shareholders’ value. The mechanism through which the firms’ value enhancement takes place is theorized by a strategic conceptualization of risk premium model. The model cites managing the firm’s four classes of risks, namely macroeconomic, tactical, strategic, and normative risks. Hence, this paper investigates the validity of the theorized value creation transmission mechanism of the proposed ERM framework via the strategic conceptualization of risk premium model.

Item Type:Citation Index Journal
Subjects:H Social Sciences > HG Finance
Academic Subject One:Finace
Academic Subject Two:Risk Managememnt
Academic Subject Three:Enterprise Risk Management
Departments / MOR / COE:Departments > Management & Humanities
ID Code:11627
Deposited By: Dr. Fong-Woon Lai
Deposited On:28 Apr 2015 02:54
Last Modified:28 Apr 2015 02:54

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