The value of implementing enterprise risk management: Evidence from Taiwan’s financial industry

Yu-Lun Chen, Yi-Wei Chuang, Hong-Gia Huang and Jhuan-Yu Shih

The North American Journal of Economics and Finance, 2020, vol. 54, issue C

Abstract: The primary purpose of this study is to examine whether companies in Taiwan’s financial industry benefit from enterprise risk management (ERM) adoption and how much value ERM activity creates. Our result indicates that a financial company implementing ERM benefits by adding 5.37% value compared to non-users. ERM adoption also significantly helps a company improve its revenue and cost efficiencies by 9.22% and 16.34%, respectively. Subsector analysis of the financial industry shows that banks and property/liability (P/L) insurers adopting ERM generate more benefits in cost savings and revenue efficiency.

Keywords: Enterprise risk management; Financial industry; Cost efficiency; Revenue efficiency (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:54:y:2020:i:c:s1062940818303000

DOI: 10.1016/j.najef.2019.02.004

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