REVIEW OF STUDIES ON THE IMPACT OF RISKS AND RISK MANAGEMENT ON FIRM VALUE

REVIEW OF STUDIES ON THE IMPACT OF RISKS AND RISK MANAGEMENT ON FIRM VALUE

LILYANA MARINOVA

Abstract

This paper reviews the existing studies devoted on the impact of various risks on firm value, as well as the impact of risk management of certain risks or as a whole on firm value. The studies can be divided in two main groups – survey-based and based on statistical data. The survey-based studies are conducted through questionnaires among company managers and reveal the perception of managers about the value of risk management. The second group of studies relies on data gathered from company reports and other financial and economic sources to infer the value from risk management. Most of the studies find that risk management increases firm value.

Key words

Risk Management, Firm Value

JEL Codes: G32

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