Determiners of enterprise risk management applications in Turkey: An empirical study with logistic regression model on the companies included in ISE (Istanbul Stock Exchange)

Serife Onder () and Huseyin Ergin ()
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Serife Onder: Vocational High School of Social Sciences, Dumlupinar University Turkey
Huseyin Ergin: Faculty of Economics and Business Administration, Dumlupinar University Turkey

Business and Economic Horizons (BEH), 2012, vol. 7, issue 1, 19-26

Abstract: Enterprise risk management (ERM), which came along with the change in the understanding of risk management in companies, refers to evaluation of all the risks as a whole and managing them in line with the targets of the company. This study aims at determining the ERM application levels of the companies included in the Istanbul Stock Exchange and the factors that affect these applications. Existence of ERM in the companies was related with having senior manager in charge of risk management. In order to explain ERM applications with profitability, leverage and company size a Logistic Regression model was established. As a result of the analysis it was determined that about half of the financial sector companies within the ISE employed a chief risk officer (CRO), which means a culture of risk management has been founded within these companies. Moreover, it was determined that profitability of the companies do not have any significance in ERM applications while the most important factors that affect the applications were found to be leverage and company size.

Keywords: Corporate governance; risk; enterprise risk management (ERM); chief risk officer (CFO); logistic regression; Istanbul Stock Exchange. (search for similar items in EconPapers)
JEL-codes: C10 M40 M42 (search for similar items in EconPapers)
Date: 2012
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