Entreprise risk management and firm performance: the case of Casablanca stock exchange

Abstract

This study investigates the relationship between Enterprise Risk Management and firm performance in underdeveloped market like Morocco. Our sample is composed of non-financial listed companies on the Casablanca Stock Exchange. The research supports two main assumptions, the first is Enterprise Risk Management components affect positively firm performance when taken separately. The second combines all the components of an ERM system and assess their effect on Moroccan firms. This paper includes a literature review of Enterprise Risk Management and presents the major empirical results about the subject. It also highlights the specifications of the Moroccan Stock Exchange through a scientific contextualization. Thanks to these two main segments, this paper offers a consistent study for evaluating ERM and performance in an Emerging Market. The empirical model followed in this paper is the first, to the best of our knowledge, in Morocco. The positive causality between ERM and performance, even though it can be challenged based on the limitations present in the conclusion of the work, remains an important piece of evidence for further studies.