Relationship between initiative risk management and firm value: evidence from Chinese financial listed companies

Zhuwei Li, Yucheng Wang, Lijie Yu and Hui An

Applied Economics, 2016, vol. 48, issue 8, 658-668

Abstract: This study considers 189 Chinese financial listed companies between 2009 and 2013 as research samples to establish indicators for evaluating the initiative risk management behaviour of financial enterprises. This work further examines the relationship between initiative risk management and firm value. Results show that financial enterprises could effectively increase firm value by taking initiative risk management measures, such as setting up departments or positions that specialize in risk management, using financial derivative instruments or engaging popular international accounting firms as audit institutions. Moreover, results reveal that the permeability of initiative risk management has an unstable effect on firm value, that is, a nonlinear relationship exists between the permeability of initiative risk management and firm value.

Date: 2016
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DOI: 10.1080/00036846.2015.1085639

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