Risk Management Theory: A Comprehensive Empirical Assessment

Kozminski Working Paper No. 01-2007

22 Pages Posted: 26 Nov 2007

Date Written: November 2007


The aim of this paper is to develop a methodology for thorough empirical testing of major contemporary corporate risk management theories: financial theory, agency theory, stakeholder theory and new institutional economics. Unlike in previous research, the tests are organised around theories, rather than individual hypotheses. I used a number of tests for robustness and subjected hypotheses to repeated testing, cross-verifying results. Evidence of tests conducted on a sample of 150 companies listed at the Warsaw Stock Exchange in Poland, covering years from 2001 to 2005, clearly point to low empirical verification of all theories considered. However, I find evidence for some theoretical determinants: currency exposure, market-to-book value, IT and service sectors and size. In conclusion I suggest implications for future empirical and conceptual research.

Keywords: corporate risk management, hedging, derivatives, CART

Suggested Citation

Klimczak, Karol Marek, Risk Management Theory: A Comprehensive Empirical Assessment (November 2007). Kozminski Working Paper No. 01-2007, Available at SSRN: https://ssrn.com/abstract=1031850 or http://dx.doi.org/10.2139/ssrn.1031850

Karol Marek Klimczak (Contact Author)

Lodz University of Technology ( email )


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