G souza et al 2012 china eg zou and hassan 2017 nan

This preview shows page 4 - 5 out of 31 pages.

, 2010; Tahir and Razali, 2011) Brazil (e.g., Souza et al. ,2012) China (e.g., Zou and Hassan 2017; Nan, 2015) and Nigeria (Ahmed and Manab, 2016) . Therefore, following the suggestions of different researchers and authors in the field of ERM who recommended to do more research in developing countries (e.g., Manab et al. 2010; Tahir and Razali, 2011, Ahmad et al ., 2014), this study attempts to extend the scope by evaluating ERM in Iran as a developing country in the Middle East which suffers from a lack of study in this field. This is important, as ERM has never been adequately addressed in Iranian businesses, especially in the financial institutions in context with practical terms. The reasons that have initiated this study to select Iran and its financial institutions as the sample of the study is related to the nature and importance of the financial sector. According to the literature, financial firms are among the first companies which adopted and implemented ERM system and hire chief risk officer (Platt, 2004; Beasley et al. , 2005; Hoyt and Liebenberg, 2011). By nature, they are exposed to face a wide array of risk because they deal with various types of customers, complicated trades, and an extensive range of financial assets. Therefore, risk management has more importance among these institutions than others (Talwar, 2011; Shafique et al. , 2013). Moreover, they have a vital effect on the nation‟s economy due to their intermediary role in surplus and deficit units (Llewellyn, 1999) as well as their efficient role in resource allocation in today‟s modern economy (El-Hawary et al. , 2007). Consequently, the health and success of these companies are significant (Llewellyn, 1999; Hoyt and Liebenberg, 2011). Moreover, this research followed the previous studies in the literature (Aebi et al ., 2012; Hoyt and Liebenberg, 2011; McShane et al ., 2011; Grace et al ., 2015) which have been conducted on financial institutions. Aligned with that, based on Iran's 20-year perspective (vision) plan, Iran is going to be ranked first in the Middle East region in terms of economic, scientific and technology levels by the year 2025. In this regard, as these institutions have an important effect on the economy of Iran, their health and success are very important. In other words, the success of these institutions is important for the economic growth of Iran to obtain the first rank position in the Middle East by 2025. Existence of any problem and crisis in this sector could have major negative effect on the total economy of the country. Moreover, due to the appearance of difficulties such as international sanctions, high exchange rate volatility, and establish unauthorized financial institutions, the improvement of risk management among financial institution of Iran is necessary. Therefore, sufficient ground exists for such studies in Iran that is mainly outside the scope of international researches and is underutilized as a selected sample in the area of ERM. Further, selecting one industry helps the researcher to control the differences that may arise from regulatory and market variation across industries (Hoyt and Liebenberg, 2011). In addition, a specific industry analysis has more significant superior internal validity than a multi-industry analysis (Ittner et al. , 2003).
Image of page 4
Image of page 5

You've reached the end of your free preview.

Want to read all 31 pages?

  • Fall '19

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors