Enterprise risk management and it impact on firm value: Empirical evidence from Vietnamese information technology firms

Abstract

The study explores the impact of Enterprise Risk Management (ERM) on firm value in information technology (IT) enterprises in Vietnam. Based on ERM theories and the COSO 2017 ERM framework, the authors developed a measurement scale to assess the level of ERM implementation, consisting of 14 criteria that integrate various risk management elements within a firm. The study collects data from 25 IT enterprises listed on the Vietnamese stock market during the 2018-2022 period and employs multivariables regression analysis to address the research question of whether effective ERM implementation enhances firm value. The findings indicate that ERM contributes positively to increasing firm value. Moreover, the results also reveal that ERM mitigates the negative impact of ROA on firm value. Based on these findings, the study recommends that managers strengthen ERM implementation, particularly for IT companies, to maximize firm value in an increasingly dynamic and uncertain global environment.