The Effect of Risk Management on the Financial Performances Among Hospitality and Tourism Companies in Malaysia

Abstract

Purpose: This study explores the effect of risk management on the financial performance of Malaysian hospitality and tourism companies. Theoretical framework: The agency theory and extreme value theory (EVT) were applying in this study. Design/Methodology/Approach: The study population is the public listed companies in Bursa Malaysia. The unit of analysis of this study is the Travel, Leisure & Hospitality Companies listed in Bursa Malaysia. With the purposive sampling method, 29 companies were selected which are suitable for the objective of this study. The secondary data used in this study were derived from the audited financial statements and annual. Findings: The findings indicates that there is insignificant and negative relationship between the risk management and financial performances of Hospitality and tourism Industry in Malaysia and the significantly positive relationship between company size and financial performances of Hospitality and tourism Industry in Malaysia. Research, Practical & Social implications: This study will be beneficial for future researcher and entrepreneurs to have access to this study in order to gain a better understanding of how to take pre-actions before starting a business in order to ensure their success. Policy implications include ensuring that prudential guidelines and other regulations governing the company's operations regarding loan facilities are reviewed periodically to address evolving credit risk issues. Originality/Value: The study provides valuable insight on the effect of risk management on the financial performances among hospitality and tourism companies in Malaysia.