Effective Risk Management and Sustainable Corporate Performance Integrating Innovation and Intellectual Capital: An Application on Istanbul Exchange Market

Sara Faedfar (), Mustafa Özyeşil, Mustafa Çıkrıkçı and Esin Benhür Aktürk
Additional contact information
Sara Faedfar: Department of Business Administration, Istanbul Aydin University, Istanbul 34295, Turkey
Mustafa Özyeşil: Department of Business Administration, Istanbul Aydin University, Istanbul 34295, Turkey
Mustafa Çıkrıkçı: Department of Business Administration, Istanbul Aydin University, Istanbul 34295, Turkey
Esin Benhür Aktürk: Department of Business Administration, Istanbul Aydin University, Istanbul 34295, Turkey

Sustainability, 2022, vol. 14, issue 18, 1-13

Abstract: Risk management requires firms to mitigate the negative consequences of market dynamics on their performance outcomes. Traditional risk management solely addresses the threats and negative consequences of risk. However, total (effective) risk management is capable of regulating out-of-control market conditions to boost corporate performance by restraining market volatility and hence providing return sustainability considering the opportunities of risk as well. Based on a sample of 286 firm-year observations drawn from 26 firms listed on Borsa Istanbul, BIST-50 index, the empirical study examines the association between total risk management and firm performance and the moderating role of innovation, intellectual capital, and the pandemic period for the years 2011–2021. The analysis is performed by applying the hierarchical panel regression using ROE and ROI as proxies to measure firm performance. The results have shown that there is a positive association between total risk management and performance measures, especially among firms applying more innovation and intellectual capital investments. However, the effect of innovation on the performance relationship of total risk management (ROE) was found to be negative surprisingly. Moreover, results suggest that total risk management has a lower positive association with firm performance during the pandemic period for both performance measures.

Keywords: effective risk management; innovation; intellectual capital; hierarchical panel regression (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/14/18/11532/pdf (application/pdf)
https://www.mdpi.com/2071-1050/14/18/11532/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:14:y:2022:i:18:p:11532-:d:914768

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().