An Empirical Investigation into Enterprise Risk Management in India

Abstract

Enterprise Risk Management (ERM) has become very critical for governance of enterprises due to rising uncertainties and failure of traditional risk management in recognizing interactions among risks. But ERM implementation across the globe remains immature, more so in India. This study examines determinants of ERM adoption for top 100 National Stock Exchange Indian companies. It further explores whether ERM adoption leads to increase in firm value. The findings suggest that firm size, leverage, profitability, and firm complexity influence the likelihood of ERM adoption. The results further reflect that firms which embrace ERM experience a positive effect on their firm value.