Enterprise risk management and company’s performance: An empirical evidence from Chinese commercial industry

Abstract

The purpose of this study is to investigate the relationship between ERM and company performance in the Chinese commercial industry. I construct an enterprise risk management index from strategy aspect and operation aspect to find the ERM level of Chinese commercial companies. I also define ERM as an integrated, comprehensive and strategic management with the method of Simona-lulia (2014). Using a sample of 175 Listed Chinese commercial companies from 2009 to 2018, I find that the imperfect ERM in the whole Chinese commercial industry had negative effects on company’s performance. I also find that company size, financial leverage and intellectual capital can influence enterprise risk management. These results establish a strong link between enterprise risk management and company performance in Chinese commercial industry.