Journal of
Economics and International Finance

  • Abbreviation: J. Econ. Int. Finance
  • Language: English
  • ISSN: 2006-9812
  • DOI: 10.5897/JEIF
  • Start Year: 2009
  • Published Articles: 348

Full Length Research Paper

Effective risk management and company’s performance: Investment in innovations and intellectual capital using behavioral and practical approach

Mohsen Jafari1, Arezoo Aghaei Chadegani2* and Vahid Biglari3
  1Department of Accounting, Azad University (Science and Research Branch), Tehran, Iran. 2Department of Accounting, Faculty of Economic and Business, University Kebangsaan Malaysia. Bangi, Malaysia. 3Department of Accounting, Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur, Malaysia.
Email: [email protected]

  •  Accepted: 14 November 2011
  •  Published: 31 December 2011

Abstract

 

Risk management is used to decrease the undesirable effects of market conditions and behavior on company’s activities and performance. This research focuses on ability of risk management response to out of control market factors to facilitate consistent profitability that leads to improvement in company’s performance. This is an empirical research that investigates the association of total risk management and company’s performance. The results indicate positive and significant relationship between total risk management and company’s performance in companies that have invested in research, development and innovations along with companies that have greater level of intellectual capital and industries that have rapid knowledge growth. The results confirm the findings of previous researches in terms of functional and practical behaviors approaches.

 

Key words: Total risk management, human capital, functional and behavioral approaches, innovation company’s specific assets.