The Effect of Enterprise Risk Management on Firm Value: Evidence from Malaysian Technology Firms
Kesan Pengurusan Risiko Enterpris ke atas Nilai Firma: Bukti dari Firma-Firma Teknologi di Malaysia

Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

m_hafiz@ukm.edu.my

Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

hawati@ukm.edu.my

Academic Director
Insaniah University College
09300 Kuala Ketil, Kedah, MALAYSIA.

drmohdhamid@insaniah.edu.my

UKM-Graduate School of Business
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

puan@ukm.edu.my

Abstract

This paper aims to examine the relationship between ERM and firm value in Malaysia. In the past literature, ERM had been argued to increase firm value but empirical evidence shows mixed and inconclusive results. Using sample from 2004 to 201 2, this paper furthers the analysis on the relationship between ERM and firm performance among technology firms in Malaysia. Indeed, technology industry is the fastest growing and a volatile industry, which requires continuous innovation. These make technology firms more prone to risk exposure. In analyzing this issue, dynamic panel data is employed to allow cross-sectional and time series analysis. Our results show that the implementation of ERM in the previous year has strong negative relationship with firm value at 1 percent significance level. It supports the argument that the effect of ERM is not immediately realized as well as entails high implementation cost. The findings provide useful input and insight in formulating new policy in relation to corporate governance, particularly ERM in Malaysia.

Keywords

Enterprise risk management; ERM; firm performance; firm value; Risk management
https://doi.org/10.17576/pengurusan-2017-49-01

Citation

Abdullah, M. H. S. B., Janor, H., Abdul Hamid, M. A., & Yatim, P. A. (2017). The Effect of Enterprise Risk Management on Firm Value: Evidence from Malaysian Technology Firms. Jurnal Pengurusan, 49, 3–11. https://doi.org/10.17576/pengurusan-2017-49-01

@article{abdullah2017effect,
  title={The Effect of Enterprise Risk Management on Firm Value: Evidence from Malaysian Technology Firms},
  author={Abdullah, Mohd Hafizuddin Syah Bangaan and Janor, Hawati and Abdul Hamid, Mohamed and Yatim, Puan},
  journal={Jurnal Pengurusan},
 

volume={49},
  number={},
  pages={3—11},
  year={2017},
  doi={https://doi.org/10.17576/pengurusan-2017-49-01},
  publisher={Penerbit UKM},
}

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49 (2017) 3 – 11

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