Determinants and Value of Enterprise Risk Management: Empirical Evidence from Germany

Enterprise risk management (ERM) has become increasingly relevant in recent years, especially due to an increasing complexity of risks and the further development of regulatory frameworks. The aim of this paper is to empirically analyse firm characteristics that determine the implementation of an ERM system and to study the impact of ERM on firm value. We focus on companies listed at the German stock exchange, which to the best of our knowledge is the first empirical study with a cross-sectional analysis for a European country. Our findings show that size, international diversification, and the industry sector (banking, insurance, energy) positively impact the implementation of an ERM system. In addition, our results confirm a significant positive impact of ERM on shareholder value.