Information Conveyed in Creating a Dedicated Risk Management Function for Implementing Enterprise Risk Management - Evidence from Taiwan

• Main Authors: Yen-Ping Chen, 陳妍萍
• Other Authors: Jung-Ho Lu
• Format: Others
• Language: en_US
• Online Access: http://ndltd.ncl.edu.tw/handle/86462057672678815199

碩士 === 銘傳大學 === 風險管理與保險學系碩士班 === 97 === Managing risks that accurately reflect risks of enterprise is one of the most important operations performed by organization. Many risk management professionals and academics pay attention to Enterprise Risk Management (ERM). ERM is the process of analyzing the portfolio of risks facing the enterprise to ensure that the combined effect of such risks is within an acceptable tolerance. While more firms are adopting ERM, little academic research exists about the costs and benefits of ERM. This study examines equity market reactions to creating a dedicated risk management function for implementing ERM. Based on a sample that has creations from 1998-2007, this study uses the multiple regression analysis reveals that there are significant relations between the magnitudes of equity market returns and certain firm specific characteristics. For nonfinancial firms, creation event period returns are positively associated with the volatility of prior periods reported earnings. For financial firms, however, there are fewer statistical associations between creation event period returns and firm.