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Article
Publication date: 15 September 2021

Bo Wang, Qiang Liang, Lihong Song and Erming Xu

With features of both “family” and “business,” family businesses must seek a balance between the emotional aspect of “family” and the economic aspect of “business” in its…

356

Abstract

Purpose

With features of both “family” and “business,” family businesses must seek a balance between the emotional aspect of “family” and the economic aspect of “business” in its organizational and decision-making processes to ensure the sustainability of the family’s entrepreneurship. This study aims to focus on how internal institutional complexity combined evolves alongside the growth of the family business.

Design/methodology/approach

The research looks, from the perspective of institutional logic, into the Charoen Pokphand Group, which is an epitome of overseas Chinese family businesses and proceeds to build a model of family business growth in the context of institutional complexity.

Findings

The research finds that as a family business grows, institutional complexity inside the organization would change from aligned period to sustaining period and then to dominant period. Then further elucidates the process of proactive response in different stages of the development of a family business. Attaching equal importance to the cultivation of entrepreneurship and to the continuation of family values and culture is the crucial mechanism by which Chinese family businesses seek a balance between family logic and business logic.

Originality/value

This paper unveils the change of institutional complexity in the evolution of family businesses and the process of action of its agency as an organization, and simultaneously partly reveals the features of entrepreneurship that overseas Chinese family businesses have as they grew, which is of positive significance for exploring and building a path of growth unique to Chinese family businesses.

Details

Nankai Business Review International, vol. 13 no. 1
Type: Research Article
ISSN: 2040-8749

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Article
Publication date: 25 February 2014

Erming Xu and Hui Yang

Although it has been proved in the macro level, that institutional quality (IQ) has significant influence on a country's economic growth, international trading, resource…

181

Abstract

Purpose

Although it has been proved in the macro level, that institutional quality (IQ) has significant influence on a country's economic growth, international trading, resource allocation, development strategy and others, its direct influence on micro level, or firm level still remains ambiguous. In this article, the authors aim to focus on the influence of IQ of a company's original region on its financial performance. The authors choose H share companies as the sample and try to answer an interesting question that whether original region matters during the development of a company in abroad stock market.

Design/methodology/approach

This article uses a panel data of 120 H share firms, each ranges from 2005 to 2009. First, the authors use sectional analysis by SPSS19.0 to test the correlations and primary relationship among variables. Then, the authors use ordinary linear square (OLS) regression model to test the hypotheses with cross-sectional to reveal the primary results. In the end, the authors use STATA 11.0 to test panel data to decide the final results.

Findings

The authors concluded that private sector development and product market development have positive effects on corporate financial performance, while laws and regulations development have negative effect. Type of the first shareholder plays an important role partly between region IQ and corporate financial performance: to governance-CFP relationship, non-state shareholders perform better than state ones; to product market-CFP relationship, state shareholders perform better non-state ones.

Practical implications

In practices perspective, this conclusion is also inspirative. This study has implications for executives, too, and should help them to better manage their ownership structure. The results suggest that managers should choose first shareholder with critical thinking. Another way, this study has implications for governments-company interactions. It suggests that governments should engage in building an institution with high quality, so that every company will benefit from it.

Originality/value

This article is the first research on region-level relationship between IQ and corporate financial performance, which is consistent with the multi-level structure of institution concept. And the authors employ H share companies as the sample, which revealed more about the conflict between governance and market embedded in regional institution.

Details

Nankai Business Review International, vol. 5 no. 1
Type: Research Article
ISSN: 2040-8749

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Article
Publication date: 2 March 2012

Zhang Han and Xu Erming

The purpose of this paper is to explore the factors impacting corporate knowledge's assimilation and exploitation; to posit the relationship between assimilation and exploitation…

394

Abstract

Purpose

The purpose of this paper is to explore the factors impacting corporate knowledge's assimilation and exploitation; to posit the relationship between assimilation and exploitation, and build up a research model to compare the differences of these relationships in companies with different ownership identities.

Design/methodology/approach

Structure equation model.

Findings

The paper finds that the function of communicational capability and social capital on knowledge's assimilation and exploitation is impacted by ownership identity.

Practical implications

In China, persons making decisions on innovation strategy of knowledge should consider the ownership identity.

Originality/value

The paper shows that the institutional factor indeed impacts knowledge transfer and innovation. Social capital and communicational capability can reduce the obstacles to knowledge's capture and diffusion, however, the institutional distance will change their function's direction and degree.

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Article
Publication date: 16 July 2024

Sylvester Senyo Horvey and Jones Odei-Mensah

This study examines the linear and non-linear effects of enterprise risk management (ERM) and corporate governance (CG) on insurers’ risk-taking behaviour.

270

Abstract

Purpose

This study examines the linear and non-linear effects of enterprise risk management (ERM) and corporate governance (CG) on insurers’ risk-taking behaviour.

Design/methodology/approach

The study employed panel data of 63 insurers from South Africa over the period 2015 and 2019. The study used the generalised method of moments (GMM) to determine the direct relationship, while the dynamic panel threshold technique was utilised to discover whether there is non-linearity in the relationship and the threshold level at which ERM and CG stimulate insurance risk-taking.

Findings

The result from the GMM elicits a positive relationship between ERM and risk-taking, implying that insurers with a robust ERM system are more likely to pursue higher risks. The empirical evidence also suggests that board size and board independence improve insurers’ risk-taking. Contrarily, gender diversity shows an inverse relationship with risk-taking. The dynamic panel threshold regression confirms non-linearities between ERM, CG and risk-taking. The empirical evidence indicates a U-shaped relationship between ERM and risk-taking, implying that a robust ERM system increases insurers’ risk-taking and vice-versa. Further, board size and independence reveal an inverted U-shaped relationship, suggesting that larger boards and a higher proportion of independent directors exhibit lower risk-taking. However, gender diversity presents a negative relationship, demonstrating a strong impact at higher threshold levels. This tells that the presence of females on the board reduces insurers’ risk-taking preferences.

Practical implications

Due to the risk-bearing nature of the insurance business, it is required that they ensure a robust ERM system for prudent risk-taking decisions. This demands strict adherence to ERM principles and allocating sufficient resources for effective implementation. Also, there is a need for strong CG structures that pay more attention to diversity when selecting board members due to their influence in ensuring improved risk-taking choices.

Originality/value

This study contributes to the existing literature by providing insights into the under-researched role of ERM and CG in insurers’ risk-taking behaviour. The study further extends the literature by providing evidence on the non-linearity and threshold levels at which ERM and CG influence insurers’ risk-taking choices. The findings are unique and contribute to the growing body of literature documenting the need for strong ERM and CG systems in insurance companies.

Details

Journal of Accounting in Emerging Economies, vol. 15 no. 1
Type: Research Article
ISSN: 2042-1168

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Article
Publication date: 17 November 2021

Zeshan Ghafoor, Irfan Ahmed and Arshad Hassan

This study aims to examine the impact of audit committee (AC) characteristics and enterprise risk management (ERM) on stock price synchronicity (SYNCH).

874

Abstract

Purpose

This study aims to examine the impact of audit committee (AC) characteristics and enterprise risk management (ERM) on stock price synchronicity (SYNCH).

Design/methodology/approach

Based on a sample of 437 US-based firms over the period 2010 to 2017, the current study uses fixed-effect and ordinary least square to test the formulated hypotheses. Majority of the sample firms are based on the S&P 500 index. This study also performs a battery of robustness checks.

Findings

The authors find that overall female members and female financial experts and female chairpersons of the AC are negatively associated with SYNCH. Similarly, the study endorses the monitoring role of financial experts and the diligence of the AC (threshold of four annual meetings), as both are negatively associated with SYNCH. However, the authors find that the AC chaired by the financial expert is also negative but insignificantly associated with SYNCH. Finally, the study finds that ERM is also negatively linked with SYNCH.

Practical implications

The findings of the current study offer some important policy implications. For instance, the shareholders can benefit from the monitoring abilities of women and financial experts by increasing their ratio in the AC. The study also offers some useful insights regarding the financial experts and chair of the AC and ERM.

Originality/value

The current study examines the association of AC characteristics with SYNCH, while the prior literature only assesses the impact of various board characteristics (such as size, independence and gender diversity). The study also contributes to the literature of ERM by providing new insights on the influence of the presence of ERM framework/program on SYNCH.

Details

Managerial Auditing Journal, vol. 37 no. 1
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 9 January 2019

Martin R.W. Hiebl, Christine Duller and Herbert Neubauer

Family firms are the most prevalent type of firm worldwide. Nevertheless, the existent enterprise risk management (ERM) literature is silent on the adoption of ERM in family…

1331

Abstract

Purpose

Family firms are the most prevalent type of firm worldwide. Nevertheless, the existent enterprise risk management (ERM) literature is silent on the adoption of ERM in family firms. Family firms exhibit specifics likely to influence the adoption of ERM. Most importantly, they often feature lower levels of agency conflicts, which should make them less prone to invest in mechanisms to control such problems. Consequently, it is expected that family firms are less prone to invest in ERM. This paper aims to explore this basic expectation.

Design/methodology/approach

This study is based on a survey of 430 firms from Austria and Germany.

Findings

It is observed that family firms show a lower adoption of ERM, especially in family firms where there is a family CEO.

Research limitations/implications

The results suggest that future empirical ERM research should more closely analyze or at least control for family influence.

Originality/value

This study is among the first to analyze ERM adoption in family firms.

Details

The Journal of Risk Finance, vol. 20 no. 1
Type: Research Article
ISSN: 1526-5943

Keywords

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Article
Publication date: 1 June 2021

Michael C.P. Sing, Venus W.C. Chan, Joseph H.K. Lai and Jane Matthews

Sustainable retrofitting of aged buildings plays a significant role in reducing energy demands and greenhouse gas emissions. This study aims to assess the performance and…

568

Abstract

Purpose

Sustainable retrofitting of aged buildings plays a significant role in reducing energy demands and greenhouse gas emissions. This study aims to assess the performance and effectiveness of energy retrofit measures (ERMs) for an archetype of aged multi-storey residential buildings.

Design/methodology/approach

The methodology consists of three parts, namely, a desktop study including the selection of a case-study building and identification of ERM options for the building; development of a computer model to simulate the building’s energy use in the baseline scenario and different scenarios of ERMs; and evaluation of the ERMs based on energy-saving rate.

Findings

Among the 13 ERMs tested, lighting-related ERMs were found to be optimal measures while window fin is the least suitable option in terms of energy saving. Based on the research findings, a two-level retrofitting framework was developed for aged multi-storey buildings.

Research limitations/implications

Future studies may take a similar approach of this study to develop retrofitting frameworks for other types of buildings, and further research paper can be extended to study retrofitting for buildings in a district or a region.

Practical implications

The findings of this study can serve as a reference for building owners to select effective ERMs for aged multi-storey buildings, which invariably exist in developed cities.

Originality/value

This study presents a pioneering work where an energy model and a building archetype were used to analyze the energy savings of a variety of ERMs that are applicable to aged multi-storey buildings.

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Article
Publication date: 28 January 2025

Garrett C.C. Smith and Gary A. Danforth

We explore the apparent value of ERM within the CB landscape in the absence of endogeneity concerns.

5

Abstract

Purpose

We explore the apparent value of ERM within the CB landscape in the absence of endogeneity concerns.

Design/methodology/approach

We explore the observed market value of enterprise risk management (ERM) in a specific industry, community banks (CBs). To do this we employ standard event study methodology. We use the surprise failures of Silicon Valley Bank (SVB) and Signature Bank (SBNY) as a natural experiment to investigate this phenomenon.

Findings

We observe several consistent results. CBs with high institutional ownership and high insider ownership exhibited a negative relationship with abnormal returns. Univariate results indicate that there is a negative relationship between ERM and CB. However, multivariate results controlling for other known factors which impact returns indicate no relationship between ERM implementation and value for CBs. Finally, we find evidence the market considers CBs to have less risk of failure or exposure to regional banking contagion, as CARs are positive when using a regional bank index as the market model benchmark.

Research limitations/implications

These results call into question the value of ERM for CBs.

Originality/value

These results call into question the value of ERM for CBs. This is the first paper to explore ERM value within CBs using a natural experiment approach.

Details

Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 13 July 2023

Parvaneh Saeidi, Sayyedeh Parisa Saeidi, Sayedeh Parastoo Saeidi, Mercedes Galarraga Carvajal, Hugo Villacrés Endara and Lorenzo Armijos

This study aims to test the effects of enterprise risk management (ERM) on firms’ outcomes and the moderating role of knowledge management (KM) on ERM–firms’ outcomes relationship.

509

Abstract

Purpose

This study aims to test the effects of enterprise risk management (ERM) on firms’ outcomes and the moderating role of knowledge management (KM) on ERM–firms’ outcomes relationship.

Design/methodology/approach

Data were collected via a questionnaire survey among public listed companies on the principal stock exchange market in Malaysia. A total of 124 questionnaires were received by mail questionnaire. The results were examined through structural equation modelling and partial least squares.

Findings

The outcomes specified that ERM has a positive and noteworthy influence on firms’ outcomes, and KM has a moderating influence on the correlation among ERM and firms’ outcomes.

Research limitations/implications

The qualities, procedures and laws of the Malaysian corporations chosen as the sample firms, as well as their regulations, may not be representative of all other countries. Moreover, this study considered only one variable as a moderator, while there are many variables that different studies can consider as moderator or mediators.

Practical implications

The results of this research imply that employees’ awareness and knowledge of events, opportunities and risk, along with their engagement in the institute’s strategy, are critical for risk management and controlling. For the managers, the results of this research can be helpful to their businesses by identifying the effective KM capability that may enhance their positive outcomes. Managers and organizations can use KM as an instrument to increase ERM effect on firms’ outcomes.

Social implications

KM and ERM are both significant intangible resources that are hard to imitate and are uniquely specified programs, which are important contributors to firm success in the long run. Moreover, the contingency theory of ERM was proved through the results of this study as it was identified in the public companies, that implementation of ERM as a strategic management practice, by organizations along with an effective KM may enhance the achievement of objectives and outcomes.

Originality/value

This study helps to measure ERM comprehensively and how intangible assets such as KM can affect the comprehensive risk management process and its effectiveness.

Details

foresight, vol. 26 no. 5
Type: Research Article
ISSN: 1463-6689

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Article
Publication date: 17 July 2020

Pablo Durán Santomil and Luis Otero González

The purpose of this paper is to analyze how enterprise risk management (ERM), the system of governance and the Own Risk and Solvency Assessment (ORSA) have been boosted with the…

1640

Abstract

Purpose

The purpose of this paper is to analyze how enterprise risk management (ERM), the system of governance and the Own Risk and Solvency Assessment (ORSA) have been boosted with the entry of Solvency II.

Design/methodology/approach

For this analysis, the authors have undertaken a survey of chief risk officers (CROs) working in Spanish insurance companies.

Findings

The results show that Solvency II has definitely promoted ERM in the European insurance industry and improved the system of governance of the insurance companies, and that the perceived value of the ORSA for the companies is higher than the cost. It is clear that the quality of ERM implemented by companies is higher in those that face more complex risks and with greater interdependencies – that is, larger companies, foreign insurers and insurers with several lines of business – but is unaffected by the legal form of the entity (mutual/corporation).

Originality/value

This study conducts primary research with surveys of CROs and develops a measure of the quality of ERM implemented by insurance companies.

Details

The Journal of Risk Finance, vol. 21 no. 4
Type: Research Article
ISSN: 1526-5943

Keywords

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