The Role of Managerial Ability, Enterprise Risk Management (ERM) in Reducing the Business Continuity Risk Using the Support Vector Machine (SVM) Model

Document Type : Original Article

Authors

1 Department of Accounting, Neyshabur Branch, Islamic Azad University, Neyshabur, Iran.

2 Department of accounting, East Tehran branch, Islamic Azad univercity, Tehran, Iran

3 Department of accounting, sabzever branch, Islamic Azad univercity, sabzevar, Iran

10.30495/ijfma.2023.71294.1961

Abstract

Background: This research examines the role of managerial ability in relation to integrated risk management and business continuity risk of companies through the use of the support vector machine (SVM) model to determine the business continuity risk index.
Methods: The support vector machine has been used to determine business continuity. The number of 180 companies listed on the Tehran Stock Exchange and 2160 years/ company observations from 2008 to 2020 (12 years) were investigated. The support vector machine model was used to measure the business continuity risks. The Ordinary Least Squares regression (OLS) was used to test the research hypothesis. The support vector machine (SVM) model was used to measure business continuity risks.
Results: The results indicate that the greater the managerial ability, the lower the business continuity risks. They also confirm that managerial ability is an important indicator in reducing business continuity risks. In addition, the managerial ability has a positive and significant relationship with Enterprise Risk Management.

Keywords

References

  • Andreou PC, Philip D, Robejsek P (2016) Bank liquidity creation and risk-taking: does managerial ability matter? J Bus Finance Account 43:226–259.
  • Berk JB, Stanton R (2007) Managerial ability, compensation, and the closed-end fund discount. J Finance 62:529–556.
  • Blue, Qasem, Arabi, & Mehran. (2019). Identify the factors affecting the comprehensive risk of state-owned banks. Bi-Quarterly Journal of Public Accounting, 5 (2), 25-46. (In persian).
  • Chen Y, Podolski EJ, Veeraraghavan M (2015). Does managerial ability facilitate corporate innovative success? J Empir Finance 34:313–326.
  • Choi W, Han S, Jung SH, Kang T (2015) CEO’s operating ability and the association between accruals and future cash flows. J Bus Finance Account 42:619–634.
  • Demerjian PR, Lev B, Lewis MF, McVay SE (2013) Managerial ability and earnings quality. Account Rev 88:463–498
  • Goldfarb A, Xiao M (2011). Who thinks about the competition? Managerial ability and strategic entry in US local telephone markets. Am Econ Rev 101:3130–3161.
  • Graham JR, Li S, Qiu J (2012) Managerial attributes and executive compensation. Rev Financ Stud, 25:144–186.
  • Hoyt, R.E. and Liebenberg, A.P. (2011), “The value of enterprise risk management”, Journal of Risk and Insurance, Vol. 78 No. 4, pp. 795-822.
  • Iswajuni, I., Manasikana, A. and Soetedjo, S. (2018), "The effect of enterprise risk management (ERM) on firm value in manufacturing companies listed on Indonesian Stock Exchange year 2010-2013", Asian Journal of Accounting Research, Vol. 3 No. 2, pp. 224-235. https://doi.org/10.1108/AJAR-06-2018-0006.
  • Kaplan SN, Klebanov MM, Sorensen M (2012) Which CEO characteristics and abilities matter? J Finance 67:973–1007.
  • Lawson, B. P., Muriel, L., & Sanders, P. R. (2017). A survey on firms' implementation of COSO's 2013 Internal Control–Integrated Framework. Research in accounting regulation, 29(1), 30-43.
  • Rokhideh, M.R; Ebrahimi, A; khamshaya, A. (2018). Interpretive structural modeling of effective factors in managing business continuity in small and medium enterprises. Business Reviews, 17 (97), 114-130. (In persian)
  • Sanjaya, C.K. and Linawati, N. (2015), “Pengaruh Penerapan enterprise risk management dan Variabel Kontrol Terhadap Nilai Perusahaan di Sektor Keuangan”, Finesta, Vol. 3 No. 1, pp. 52-57.
  • Shahsahebi, S., Darabi, R., & hamidian, M. (2020). Artificial Intelligence Approach Analyzing Management Ability Based on Accounting and Corporate Governance Criteria. International Journal of Finance & Managerial Accounting, 5(17), 67-83.
  • Singh, Anil Kumar and Anant Kumar Jain. "Business Continuity during Adversity and Strategies to Revive Certain Sectors." IJSKD vol.14, no.2 2022: pp.17-40. http://doi.org/10.4018/IJSKD.2022040102
  • Widjaya, P.E. and Sugiarti, Y. (2013), “Penerapan Risk Management Untuk Meningkatkan Non-Financial Firm Performance Di Perusahaan Murni Jaya”, Calyptra: Jurnal Ilmiah Mahasiswa Universitas Surabaya, Vol. 2 No.

Files

Share

How to cite

Statistics