Abstract
Operational Risk Management is an important aspect in an organisation. It is important for an organisation to manage operational risk efficiently. Hence this study attempted to investigate the influence of firm specific factors and microeconomics factors affecting operational riskof firms in manufacturing industry in Germany. This study employs time series regression analysis of firms in manufacturing industry in Germany from 2012 to 2016. The analysis shows that firm specific factors (average collection period and current ratio) and macro economic factor influence the operational risk of the firms. This study suggest that the firms should manage their account receivable efficiently by establishing clear credit policy and company must make sure they manage their liquid assets wisely in order to prevent from becoming insolvent.
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