The Relationship between Risk Management and Firm Value

摘要：

This paper provides an analysis of the relationship between risk management and firm value. Based on perfect market hypotheses, risk management is irrelevant to firm value. However, in the imperfect financial markets, based on shareholder value-maximizing, risk management can increase firm value through reducing the firms taxes, costs of financial distress, and underinvestment problem;based on managerial risk aversion, risk management is initiated by managerial incentives for their private utility and may decrease firm value. So the most important thing is that the managerial compensation contract must be designed exactly so that when increase the value of the firm, managers also increase their expected utility.

关键词： Risk management Firm value Relationship

作者: JIA Weiying CHEN Baofeng

作者单位: College of Economics and Management China Agricultural University,P.R.China,100084;Accounting Depart College of Economics and Management China Agricultural University,P.R.China,100084

会议类型: 国际会议

会议名称: The 5th International Annual Conference on WTO and Financial Engineering(第五届WTO与金融工程国际会议)

会议地点: 杭州

会议语种:英文

页码: 409-412

在线出版日期: 2008-05-18（万方平台首次上网日期，不代表论文的发表时间）