MODELLING THE IMPACT OF CORPORATE RISK MANAGEMENT ON FIRMS FINANCIAL PERFORMANCE AND SUSTAINABLE GROWTH: EVIDENCE GROUNDED ON EMERGING AND DEVELOPED COUNTRIES

Abstract

Growing complexities in the indigence and global business environment the demand of Corporate Risk Management (CRM) has fostered gigantically. Equally, Financial Performance (FP) and Sustainable Growth Rate (SGR) are believed to be the vital parameters for assessing the success of any organization. Both FP and SGR are get affected by different risks. Therefore, to the best of knowledge, this paper is first endeavor meant to empirically shed light on Impact of CRM on firm's (FP) and (SGR). By taking sample of 160 listed non-financial firms from emerging as well as developed Countries stocks markets, on the bases of market capitalization, covering period of 12 years (2007-2018). The CRM index has been constructed by using Principal Component Analysis (PCA) technique. Panel data fixed-effect Model applied on base of Hausman. The results articulated that CRM has significant and positive impact on ROE and SGR in context both cases whereas Inflation has negative relation with both scenarios, but size and Gross Domestic Product (GDP) have positive and significant relationship with ROE and SGR. However, in case of Pakistan, Size and GDP have articulated adverse effect on ROE and SGR.