Determinants of Enterprise Risk Management: Empirical Evidence From Greater Bay Area of China

Jingxue Yuan; Ai Ping Teoh

Jingxue Yuan
Ai Ping Teoh

Abstract

The problem of the enterprise risk management in the Guangdong-Hong Kong-Macao Greater Bay Area has become increasingly serious, especially in the face of the economic recession in the post-epidemic era and enterprises are constantly seeking a way out for sustainable development. Enterprise risk management is particularly important for this emerging Bay Area. On the basis of predecessors, this study empirically analyses the enterprise risk management of 708 listed companies in China's GBA. Through data processing and literature search, this paper focuses on the influence of the drive for executive support, research and development expenditure and knowledge integration capability of employees on ERM. In factor analysis, the principal component factor is used to reduce the dimension of many factors, and then regression analysis is used to model and analyse the relationship between variables. Through the use of SPSS analysis software, combined with factor analysis and regression analysis, it can be concluded that there is a positive correlation between enterprise risk management and the three influencing factors, which have a significant impact on ERM. Therefore, the attitude of senior executives to actively support and explore ERM, the experience and education of employees, and the expenditure of enterprise research and development expenses are all the exposure of enterprise risk. In order to keep the sum of exposure within the sustainable risk appetite of the enterprise, it is important to pay attention to the trends and strategic plans of these indicators. It is hoped that this will provide value for enterprises to continuously improve their own risk management system.

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