Title: Predicting enterprise risk management adoption among manufacturing firms in Suzhou, China
Authors: Shuqian Lu; Ai Ping Teoh
Addresses: Graduate School of Business, Universiti Sains Malaysia, 11800 Penang, Malaysia ' Graduate School of Business, Universiti Sains Malaysia, 11800 Penang, Malaysia
Abstract: The main objective of this study was to ascertain the determinants of enterprise risk management (ERM) adoption for manufacturing firms in Suzhou, China. Supported by the agency theory and resource dependence theory, eight determinants of ERM adoption were identified from extant literature and tested in this study. Since ERM adoption was treated as a dichotomous variable, the effect of the eight independent variables on ERM adoption was analysed by using the binomial logistic regression using the SPSS Statistical Software. Secondary data was obtained from the China Stock Database, annual reports and official websites of 108 manufacturing firms in Suzhou, China. This study recognised chief risk officer, institutional ownership, turnover, size, international diversification and profitability as significant predictors whereas leverage and cash ratio shown no impact on ERM adoption. This study provides policymakers with important guidelines on ERM adoption and contributes towards the development of the Chinese manufacturing market.
Keywords: enterprise risk management; ERM; adoption; manufacturing; binomial logistic regression; China.
International Journal of Business Continuity and Risk Management, 2022 Vol.12 No.4, pp.299 - 315
Received: 30 May 2021
Accepted: 14 Oct 2021
Published online: 04 Jan 2023 *