Operational risk and its determinants among five companies in manufacturing industry in Germany

Nur Alisha Arfiffy Cipriano, Nur Nabila Zulkeflee, Fasihah Amran and Haziah Aishah Shahudin

MPRA Paper from University Library of Munich, Germany

Abstract: Operational risk management is an important aspect in an organization to manage operational risk efficiently. Hence, this study intended to investigate the effects of internal and external factor in manufacturing industry towards operational risk. This study employs time series regression analysis of manufacturing industry in Germany from 2012 to 2016. The analysis shows that firm specific factors (average current ratio and average collection period) and macroeconomic factors (the company’s beta) influence the operational risk of the company. This study suggests the company to manage their average collection period by managing their account receivable efficiently through establishing clear credit policies and incorporate more corporate governance elements such as accountability, fairness, independence and transparency.

Keywords: Operational risk; Average collection period; corporate governance (search for similar items in EconPapers)
JEL-codes: G3 G32 (search for similar items in EconPapers)
Date: 2018-05-25
New Economics Papers: this item is included in nep-cfn and nep-rmg
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:87013

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