The impact of enterprise risk management on the cost of debt in Vietnamese listed firms: Evidence from abnormal enterprise risk management index

Abstract

The study examines the impact of enterprise risk management (ERM) on the cost of debt in
Vietnamese listed firms during 2010-2020. The effectiveness of enterprise risk management is measured by
abnormal enterprise risk management (ABERMI). By applying multivariable regression models, the empirical
results show that firms with effective enterprise risk management through low ABERMI will reduce the cost
of debt. In addition, the study also proves that firm size, profitability, and the fact that firms are audited by
one of the four large auditing companies have negative effects on the cost of debt while firms having high
financial leverage increase the cost of debt