IDEAS home Printed from https://ideas.repec.org/a/sae/ausman/v49y2024i3p366-402.html
   My bibliography  Save this article

Enterprise risk management and investment efficiency: Australian evidence from risk management committees

Author

Listed:
  • Haiyan Jiang

    (Department of Accounting and Corporate Governance, Macquarie University, Sydney, NSW, Australia)

  • Jing Jia

    (School of Business and Economics, University of Tasmania, Australia)

  • Larelle (Ellie) Chapple

    (QUT Business School, Queensland University of Technology, Brisbane, QLD, Australia)

Abstract

This study investigates whether and how effective risk management committees (RMCs) improve corporate investment efficiency. Using a sample of listed companies included in the Australian Securities Exchange (ASX) 300 index, we document that effective RMCs improve investments’ sensitivity to growth opportunities and profitability. The results also reveal that effective RMCs enhance corporate investment efficiency by restricting not only over- but also underinvestment. Subsequent analyses demonstrate that the positive effect of RMCs on investment efficiency is due to the reduced information asymmetry and free cash flow problems. Furthermore, we find a more pronounced effect of RMCs on investment efficiency when companies experience a high level of economic policy uncertainty (EPU) and financial constraint. JEL Classifications: G14, G34, M41

Suggested Citation

  • Haiyan Jiang & Jing Jia & Larelle (Ellie) Chapple, 2024. "Enterprise risk management and investment efficiency: Australian evidence from risk management committees," Australian Journal of Management, Australian School of Business, vol. 49(3), pages 366-402, August.
    • Handle: RePEc:sae:ausman:v:49:y:2024:i:3:p:366-402
    DOI: 10.1177/03128962221144513
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/03128962221144513
    Download Restriction: no
    File URL: https://libkey.io/10.1177/03128962221144513?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Economic policy uncertainty; financial constraint; investment efficiency; risk management committee;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ausman:v:49:y:2024:i:3:p:366-402. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.agsm.edu.au .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.