Received: 2019-06-17  |  Accepted: 2019-10-20  |  Published: 2019-12-15

Title

How enterprise risk management (erm) can affect on short-term and long-term firm performance: evidence from the Iranian banking system


Abstract

Enterprise risk management (ERM) has emerged as a more integrated risk management (IRM) framework in recent years. Many studies have been conducted in recent years to determine the effects of ERM implementation on other parts of an organization. The purpose of this research was to explore the relationship between ERM implementation and organizational performance. The research sample consisted of Iranian banks that either had a license from the central bank of Iran (CBI) or were active in the stock market. A novel measure of ERM implementation was employed in this study. Furthermore, the return on equity (ROE) and Tobin's Q ratio were used as two measures of organizational performance. The results showed that there was a positive and significant relationship between ERM implementation and Tobin's Q ratio, whereas such a significant relationship was not observed between ERM implementation and ROE. The study findings suggested that the adoption of an ERM strategy influences the long-term performance of a firm, not its short-term performance.


Keywords

enterprise risk management, organizational risk management, integrated risk management system, Iranian banking system, firm performance, return on equity, Tobin’s Q ratio


JEL classifications

G32 , D81


URI

http://jssidoi.org/jesi/article/444


DOI


Pages

1387-1403


Funding


This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License

Authors

Nasr, Arash Khalili
Sharif University of Technology, Tehran, Iran http://www.sharif.ir
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Alaei, Saideh
Sharif University of Technology, Tehran, Iran http://www.sharif.ir
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Bakhshi, Fateme
Sharif University of Technology, Tehran, Iran http://www.sharif.ir
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Rasoulyan, Farzin
Sharif University of Technology, Tehran, Iran http://www.sharif.ir
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Tayaran, Hojat
Iran University of Science and Technology, Tehran, Iran http://www.iust.ac.ir
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Farahi, Mohammad
University of Isfahan, Isfahan, Iran http://ui.ac.ir
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Journal title

Entrepreneurship and Sustainability Issues

Volume

7


Number

2


Issue date

December 2019


Issue DOI


ISSN

ISSN 2345-0282 (online)


Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Google Scholar

Article views & downloads

HTML views: 1864  |  PDF downloads: 670

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