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We consider a risk sharing problem in which agents pool their random costs together and seek an allocation rule to redistribute the risk back to each agent. The problem is put into a cooperative game framework and we focus on two salient properties of an allocation rule: stability and...
Persistent link: https://www.econbiz.de/10012954145
We show that installing stronger risk management into financial institutions – a proposal widely discussed following the 2008 financial crisis – is insufficient to constrain institutions' exposure to investment with lurking risk, such as asset-backed securities. Financial regulations affect...
Persistent link: https://www.econbiz.de/10012901522
Enterprise Risk Management (ERM) is the approach of managing all risks faced by a firm in an integrated, holistic fashion. This research analyzes factors that influence a firm's decision to start an ERM program. We argue that top management's decision to adopt ERM is influenced by managerial...
Persistent link: https://www.econbiz.de/10012908547
We study the relationship between enterprise risk management and firm value. We analyze how the influence and reporting of the chief risk officer (CRO) and the incentives to compensate him or her contribute to firm value. We use U.S. publicly traded insurers data between 2009 and 2017 and find...
Persistent link: https://www.econbiz.de/10012890245
The plant production, as the primary production in agriculture is at risk of natural disasters and other harmful incidences. Thus, the agricultural production which mostly takes place “under the open sky” is always exposed to the influence of many natural factors that cannot be often...
Persistent link: https://www.econbiz.de/10012895267
Enterprise risk management (ERM) is the approach of managing all risks faced by an enterprise in an integrated, holistic fashion. This research investigates whether the utilization of the ERM approach helps firms achieve economies of scale and scope. We use detailed survey data of German...
Persistent link: https://www.econbiz.de/10012897603
This paper develops a risk-management view of CSR by arguing that CSR provides insurance-like effects in adverse corporate events. Since passive investors have diversified away most idiosyncratic risks, we predict that they demand less CSR as a strategic approach to manage risks. Using the...
Persistent link: https://www.econbiz.de/10012935680
Enterprise Risk Management (ERM) is a process that manages all risks in an integrated, holistic fashion by controlling and coordinating any offsetting risks across the enterprise. This research investigates whether the adoption of the ERM approach affects firms' cost of equity capital. We...
Persistent link: https://www.econbiz.de/10012936976
We study the effect of risk management on policy sales (life insurance and annuities) of life insurers. For identification, we exploit the staggered adoption of Section 711 of the Insurer Receivership Model Act, granting derivatives counterparties of insurers the right to terminate the contract...
Persistent link: https://www.econbiz.de/10012823504
Using derivative positions and a regulatory change that results in different regulatory risk sensitivities for economically similar products, I show that inconsistencies in regulatory incentives restrict hedging and increase shadow insurance for U.S. life insurers. Insurers exposed to products...
Persistent link: https://www.econbiz.de/10012849965