Risk Research Articles

Relationship between Climate Change and Business Risk: Strategies for Adaptation and Mitigation: Evidence from a Mediterranean Country

Global corporate operations are facing significant challenges as a result of climate change. Businesses are exposed to a variety of dangers because of their effects, which might include anything from changing regulations to excessive weather. The objective of this research is to examine the connection between business risk and climate change, with a particular emphasis on the success of different adaptation and mitigation tactics used by Greek companies. A cross-sectional study was carried out among 345 enterprises in Greece using a quantitative research methodology. To investigate the relationship involving company risk management, adaptation, and mitigation plans with climate change risks, descriptive, correlational, and regression analyses are employed. Businesses are most distressed about the financial risks associated with climate change, followed by supply chain disruptions and physical hazards. Moreover, developing climate-resilient infrastructure and enhancing catastrophe preparedness have evolved into vital adaptation tactics. Also, converting to renewable energy sources is the most preferred approach to mitigation initiatives. Furthermore, the study demonstrated a significant positive correlation between climate change mitigation strategies and effective business risk management. Nevertheless, as perceived climate change risks increased, business risk management effectiveness decreased. The study suggests that Greek businesses are actively engaging in climate change risk management strategies that embrace both adaptation and mitigation strategies. Yet, the study recommends a continued focus on developing resilient infrastructure and collaborative efforts with local communities, governments, and NGOs. Businesses should also prioritize the shift to renewable energy sources to better mitigate their carbon emissions. This research contributes significantly to understanding how companies can strategically address the challenges of climate change. Furthermore, the study provides valuable insights into the dynamics of climate change adaptation and mitigation in a specific geographical area, thereby enhancing the global dialogue on climate resilience and sustainable business practices.

In-depth Analysis of Business Risks in the Cattle Livestock Industry: Comprehensive Literature Review

Cattle farming is a vital sector in the livestock industry, but it is also faced with various complex business risks. This literature review aims to provide an in-depth understanding of the risks associated with cattle farming. Through a thorough analysis of various literature sources, we explore the main aspects that influence risk in the cattle industry, including external factors such as fluctuations in feed prices, changes in government policies, and market uncertainty, as well as internal factors such as livestock health, financial management, and operational efficiency. By thoroughly understanding these risks, cattle farmers can develop effective mitigation strategies to increase the resilience of their business amidst the challenges facing the cattle farming industry.

ОРГАНІЗАЦІЙНО-МЕТОДИЧНЕ ЗАБЕЗПЕЧЕННЯ АУДИТУ БЕЗПЕРЕРВНОСТІ ДІЯЛЬНОСТІ ПІДПРИЄМСТВ

The article is concerned with disclosing the theoretical, organisational foundations and methods of continuity audit based on analytical procedures. The purpose of the study is to substantiate the theoretical, organisational and methodological foundations of the going concern audit of enterprises under conditions of uncertainty. Object of research - organisational and methodological support for the audit of business continuity of enterprises. Methods used in the study: scientific cognition, method of generalisation, comparison, logical and substantive, methods of induction and deduction, analysis. The main hypothesis is the development of organisational and methodological foundations of the going concern audit based on the expansion of analytical procedures to meet the information needs of stakeholders about the status and potential of the financial viability of the enterprise's going concern under conditions of uncertainty. Summary of the main material. Under martial law, the importance of the continuity audit as a tool for protecting the interests of users of financial statements and ensuring that stakeholders are aware of the state of financial solvency and prospects for sustainable development of enterprises increases. Organisational and methodological support of the continuity audit is determined by the objectives of the audit and the needs of stakeholders to obtain reliable information on the assessment of financial viability to ensure continuing operations in the future. The proposed methodology for auditing the going concern of enterprises based on analytical procedures provides a holistic view of the organisation of the audit by the following stages: 1) analysis of liquidity and solvency of enterprises; 2) analysis of profitability potential; 3) analysis of financial stability; 4) analysis of risks of activity; 4) analysis of the potential of continuous activity of the enterprise. Particular attention in the process of a going concern audit is paid to the classification and analysis of business risks. Analytical procedures for assessing business risks, determining reserves to cover losses of economic benefits in relation to the risks of non-payment of receivables and reduction in the value of financial instruments have been substantiated. The methodology for auditing the going concern of enterprises based on the expansion of analytical procedures, the implementation of which provides an opportunity to generate high-quality information to assess the potential of the enterprise's going concern, taking into account the risk and prepare a reasonable audit opinion, is original and of practical importance. Conclusions. The implementation of scientific and methodological recommendations on the organisation and methodology of the continuity audit based on the expansion of analytical procedures will help to obtain sufficient evidence for a realistic assessment of the potential of financial solvency of enterprises, preparation of the audit opinion on compliance with the principle of continuity and improve the quality of the audit.

Financial Statement Fraud Risk and Financial Distress of Family Business: Socio-Emotional Wealth (SEW) Perspective

Financial Statement Fraud Risk and Financial Distress of Family Business: Socio-Emotional Wealth (SEW) Perspective

The Influence of Company Size, Business Risk, and Sales Growth on Capital Structure Mediated by Profitability

This study aimed to determine the effect of company size, business risk, and sales growth on capital structure with profitability as an intervening variable on the JII stock index on the Indonesia Stock Exchange (IDX) from 2017 to 2021. The method used to determine the research sample is purposive sampling. The source of data in this research is secondary data. Data analysis techniques used path analysis, t-test (partial), and Sobel test (mediation) using SPSS version 23. The study's results stated that company size, sales growth, and profitability have a significant effect on capital structure while business risk has no significant effect on capital structure. Company size, business risk, and sales growth significantly affect profitability. The Sobel test results state that company size, business risk, and sales growth have a significant effect on capital structure mediated by profitability, meaning that mediation occurs.

Faktor-Faktor Yang Mempengaruhi Struktur Modal Dengan Kepemilikan Manajerial Sebagai Variabel Moderasi

This research aims to analyze the influence of liquidity, business risk, asset structure, profitability and company size on the company's capital structure. Apart from that, this research also examines the role of managerial ownership as a moderating variable that can influence the relationship between the independent variable and the dependent variable. This research uses a sample of 603 manufacturing companies listed on the Indonesia Stock Exchange for the 2020-2022 period. The method used in sampling is based on criteria (purposive sampling). The data collection method in this research uses library research by means of documentation and literature. The results of this research show that liquidity, business risk, asset structure, profitability and company size have no effect on capital structure. Managerial ownership is able to moderate the relationship between company size and capital structure. Managerial ownership is unable to moderate the relationship between liquidity, business risk, asset structure and profitability on capital structure.

THE EFFECT OF FINANCIAL RATIO AND BUSINESS RISK ON FIRM VALUE

The purpose of this study is to obtain empirical evidence regarding the effect of financial ratios and business risk on firm value. There are eight independent variables in this study, namely profitability, leverage, liquidity, business risk, company size, institutional ownership, asset management, and company growth. The object of this research is manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2020-2022 with specifications for the energy industry, consumer cyclicals, and consumer non-cyclicals. The sampling technique used in this study is purposive sampling and uses multiple regressions in analyzing data. There are 58 companies that passed the sample selection criteria from 174 data. The results of this research indicate that profitability, leverage, business risk, and firm size affect firm value. Meanwhile, other independent variables such as liquidity, institutional ownership, assets management, and company growth have no effect on firm value.

Peran Profitability dalam Memoderasi Pengaruh Predictor Debt Policy

The research aims to examine and analyze the effect of business risk, company growth, company size, asset structure, and free cash flow on debt policy with profitability as a moderating variable. The population of this study consists of 191 mining companies for the period of 2020-2022 listed on Indonesia Stock Exchange (IDX). The sampling technique was purposive sampling and 106 company were used. This type of research was correlational method. Data analysis was performed using classical assumption, hypothesis testing, and moderating regression (MRA) using IBM SPSS 25 version. Partially, the result of the study indicate that company growth and company size had a significant positive effect on debt policy; free cash flow had a significant negative effect on debt policy; meanwhile, business risk and asset structure had no significant effect on debt policy. The result of the moderation test in this study indicate that profitabiliy can moderate the effect of company growth on debt policy. Meanwhile, profitability is unable to moderate the effect of business risk, company size, asset structure, and free cash flow on debt policy.

EXPLORING THE ROLE OF GOVERNMENT ASSISTANCE TOWARDS MICROENTERPRISES' PARTICIPATION IN TAKAFUL: A QUALITATIVE PERSPECTIVE

The study aims to discuss a comprehensive overview pertaining to the microenterprise’s participation in Takaful with the aid of government role. This study was conducted qualitatively where the data gathered through semi-structured interview with a microenterprise’s owner. The findings revealed three distinct themes that consist of business operations and risk exposures, the awareness of microenterprise owner with regards to Takaful and Insurance schemes, and his perception towards government role in assisting business owner to participate in Takaful. From the findings, it showed that low risks encountered by the owner due to strategic location of his business and there is an awareness on the importance of protection (Takaful/insurance) in protecting himself and his business. Furthermore, the findings also discover the limitation of the owner’s understanding relating to government assistance in helping the microenterprises to participant in Takaful scheme. The findings of the study enrich the existing knowledge about the obstacles and possibilities encountered by microenterprises. Additionally, the data gathered can be used to develop policies and support systems that are specifically designed to address the business risks among microenterprises.

Methods of constructing integral indicators for assessing entrepreneurial potential of the rural population

Purpose - methods of analyzing quantitative and qualitative indicators of the research results on entrepreneurial potential in rural areas, formation of methodological tools for integral assessment of the state of business activity in the regions of Kazakhstan are considered. Methods - statistical, ranking, rating system - reveal the main factors affecting the business initiative of entrepreneurs, contribute to the determination of indices of entrepreneurial activity, which makes it possible to achieve specific objective decisions. Results - it is shown that these regulatory materials comprehensively assess the state of small and medium-sized agribusiness in the republic and can be used in the development and adjustment of government programs, national projects, and further scientific research, taking into account trends in innovation and environmental friendliness of agro-industrial production. Conclusions - development of entrepreneurship in agricultural sector determines economic and social situation, creates favorable conditions for production of competitive agricultural products and food. Small and medium-sized businesses are able to raise the status of social sustainability of the village and support diversification. Effective measures are needed to effectively manage business risks. The necessity of forming optimal parameters when monitoring business processes at enterprises is substantiated as a basis for solving such problem as identifying their potential resource capabilities and using them in the future. The purpose of this approach is to timely identify “critical points” and apply modern methods to improve the efficiency of small agricultural businesses. The proposed methodology is especially important in the field of strategic planning and forecasting, for the implementation of results-oriented management procedures, program-target budgeting when implementing large innovative projects in the regions.

Business Risk Management Ideology and Entrepreneurial Development of Students in Tertiary Institutions in Southwestern, Nigeria

This study investigated the relationship between Business Risk Management (BRM) ideology and the entrepreneurial development of students in tertiary institutions within Southwestern Nigeria. A quantitative research design was employed, with data collected from a sample of 1918 students across five federal universities in the region. The research instrument was a structured questionnaire designed to gather information on risk identification, risk assessment and evaluation, risk mitigation and control strategies, entrepreneurial intentions, self-efficacy, and entrepreneurial behavior. The findings suggest a positive relationship between BRM ideology and the entrepreneurial development of students. Specifically, risk identification was found to significantly influence entrepreneurial intentions (p < 0.01) and self-efficacy (p < 0.05). Risk assessment and evaluation also demonstrated a significant positive impact on entrepreneurial intentions (p < 0.01), self-efficacy (p < 0.01), and entrepreneurial behavior (p < 0.05). Additionally, risk mitigation and control strategies were found to significantly contribute to entrepreneurial intentions (p < 0.01), self-efficacy (p < 0.01), and entrepreneurial behavior (p < 0.01). These findings highlight the importance of integrating BRM education into the curriculum of tertiary institutions in Southwestern Nigeria. By equipping students with the knowledge and skills to identify, assess, and mitigate potential risks, they are better prepared to navigate the challenges and uncertainties inherent in entrepreneurial ventures. This, in turn, can contribute to the growth of a vibrant and resilient entrepreneurial ecosystem in the region.

Analisis Trade-Off Theory dan Pecking Order Theory Terhadap Struktur Modal

people hence its liquidity. Through incentive given by the government, property sector in Indonesia is believed to have good performance. Incentives such as subvention for price and VAT are given and supposed to increase purchasing power. The reality is market intentions and incentives provided by the government still do not essentially guarantee a company’s sustainability. Therefore, this study is meant to identify variables that considered to be the most relevant theory in funding decisions of property and real estate companies in Indonesia. This study is descriptive quantitative research using purposive sampling method and utilise 70 observations data that would be processed by panel data regression analysis. It is founded that through trade-off theory, a business risk perspective is considered to have no effect in determining the capital structure. Other perspectives from trade-off theory and pecking theory which are debt tax shield and financial deficit are considered to have positive effect, but firm age has negative effect on determining the capital structure. Through this research, company in property and real estate sector in Indonesia can be considered as a moderate risk taker because their capital structure will be increasing when having benefit from tax or facing financial deficit. They still consider the external factors and tend to fine with the risk and balancing the trade-off between the risk and the benefit of the source of fund

Threats and Hazards of Grey Rhino Paradigm

Grey Rhino is a metaphor for security threat, which is unkept irrational for large extent also high probability of harmful effect on a subject of risk owner. Business continuity management system is assessed in a diagram as controlling instrument aimed at operational hazard mitigation of continuity disturbance of affected subject. A ´from Operations´ Value Added – O´VA is established as qualitative dynamic information about productivity of activities. The measures are designed in crisis scenario for quality improvement of subject´s crisis readiness. An indicator of business risk continuity slip is defined. In a connection with war conflict on Ukraine is assessed if it is Grey Rhino manifestation.

DIVERSIFICATION STRATEGY TO MAINTAIN SME BUSINESS SUSTAINABILITY IN YOGYAKARTA

This paper discusses the diversification strategy practices carried out by SMEs in DIY Province to maintain the continuity of their business. This was done because of the COVID-19 pandemic which caused reduced sales and demand for SMEs, especially in the fashion and craft industry sectors. The objects observed for writing this paper are four SMEs in the fashion and craft industry sector which are registered on the website of the Ministry of Cooperatives and Small and Medium Enterprises as SMEs that produce masks, hand sanitizers and personal protective equipment (PPE) needed to prevent the spread of COVID-19. 19. The results of the observations made show that the four SMEs implemented concentric diversification and market diversification strategies to minimize business risks and maintain business sustainability.

Application of Business Ethics By Shirkah Contract: A Case Study of Indonesian Farmer Tradition

Economists argue that positivism refers to science and economic activities should be value-free. This means that the norm variable is not included as a variable that has an important meaning for both output and production input. This is not the case with Islamic economics, which firmly states that economic activity is bound to value or is not value-free. This research aims to show evidence of shirkah or profit-sharing contracts and to dissect how elements of values and ethics accompany the business activities of Indonesian farming communities. The method used is a qualitative approach with case study techniques. Literature studies are also used to strengthen the validation and triangulation stages. This research shows that Shirkah contracts are found in agricultural activities in various regions in Indonesia, including those known as maro (50:50), mertelu (1:3), etc. Shirkah, as one of the contracts in Sharia finance, is an actual implementation of enforcing norms and ethics. The Shirkah contract manages the risks inherent in all business cycles, both during profits and losses, which is typical in all sectors. Shirkah contracts systematically work and control competition and business risks with an ethical and normative approach. The Shirkah contract also suppresses economic injustice and unequal distribution of resources and business profits. The domino effect of the values of the sharia contract is not only limited to production-sharing agreements between sharecroppers and land owners but also spreads to the spirit values of sale and purchase (Murabaha) and rental (ijarah) agreements and includes broad implications for all aspects life. Farmers and cultivators are actively involved in upholding the values of justice, risk sharing, and togetherness in facing the cycle of profit and loss that automatically occurs as a lifestyle. Musharaka, Morals-ethics, Risk management, Way of life

Financial services of banks and outsourcing of functions. Risk specifics and regulation

Subject. This article examines the prospects for outsourcing of financial functions and the problems of banks caused by objective risks and the lack of legal status of outsourcing. Objectives. The article aims to identify the key objective factors of the development and risks of outsourcing based on new digital technologies in the financial sector and assess the feasibility of segregating outsourcing contracts in the legal field to improve regulatory practice. Methods. For the study, we used an interdisciplinary approach, contextual analysis, and comparison. Results. The article formulates a set of key factors that stimulate the development of outsourcing of functions in the financial sector and cause an increase in the importance of risks for the banking business. It presents the author-developed approach to distinguishing the terms Financial Service, Financial Function and Microservice as part of a financial service. The article specifies possible benefits for the bank in the legal definition of an outsourcing transaction. Conclusions and Relevance. Outsourcing of financial functions is an objectively necessary way to strengthen the competitiveness of banks in the digital economy, and some of the presented problems of banks related to outsourcing of functions can be solved by introducing a specific form of outsourcing agreement into the legal field. The material of the article is of practical importance for the risk management of the financial sector, as well as specialists in the legal support of regulation of the financial sector of the economy.

İncir Üretiminde Risk Kaynakları, Aydın ili örneği

Amaç: Bu araştırmanın temel amacı, incir üreten çiftçilerin karşılaştıkları risk kaynaklarını belirlemek, bunları önem derecesine göre sıralamak ve birbiri ile olan ilişkilerini analiz etmektir. Tasarım/Metodoloji /Yaklaşım: Bu araştırma Aydın ilinde faaliyetlerini sürdüren 101 incir üreticisi ile yapılan anketlerden elde edilen verilere dayanmaktadır. Araştırmada çiftçilere ait risk kaynaklarının varlığı faktör analizi yardımıyla açıklanmıştır. Ayrıca DEMATEL yöntemi kullanılarak risk faktörleri önem derecesine göre sıralanarak birbirleriyle olan etkileşimleri keşfedilmiştir. Bulgular: Araştırmada belirlenen 9 faktör önemine göre iklim, üretim, piyasa, gıda güvenliği, işletme, arazi, pazarlama, toprak ve teknik bilgi riskleri şeklindedir. İklim, piyasa, arazi ve teknik bilgi riskleri diğer risk faktörlerini önemli derece etkilemektedir. İklim riski tüm diğer riskleri etkilerken, pazarlama riski tüm risk faktörlerinden etkilenen konumdadır. Özgünlük/Değer: Bu araştırmada incir üreticileri için özgün bir yöntem kullanılarak kapsamlı bir risk analizi oluşturulmuştur. Böylece bu alandaki literatürün gelişimine önemli bir katkı sağlanmıştır. Sosyal çıkarımlar: Sonuçlar incir üreticilerinin risk faktörlerini daha iyi yönetmek için sürdürülebilir üretim, tarım sigortası ve yayım hizmetlerine ihtiyaç duyduğunu göstermektedir.

Стратегии выхода российских организаций на международные рынки в изменившихся внешнеэкономических условиях

The change in the system of world economic communications as a result of sanction policy towards Russia and its allied countries forces enterprises and organizations to prove strategies of entry into foreign markets for the purpose of income generation and inclusion in new value chains. Therefore, the purpose of this research is the comparative analysis of factors and assessment of the application of international market entry strategies of Russian IT companies. Qualitative and quantitative methods of economic research were applied to achieving this goal. Qualitative methods included PESTEL analysis, situation and comparative analysis. Quantitative methods included the cost-benefit method, statistical techniques and economic analysis methods. Tabular and graphic approaches are used for text visualization. In this research the factors influencing organizations activity in the international sphere and also the main foreign market entry strategies of IT companies were analyzed. Comparative analysis revealed benefits and shortcomings of each strategy, taking into account modern forms of business and currency risks. For the Russian IT company producing software three strategies were evaluated: export, franchising and direct investments. The choice of the IT industry for considering international market entry strategies of Russian organizations is proven. It is necessary to separate the development of new technologies and infrastructure, existence of financial resources and pressure of economic sanctions from the factors influencing this process. Of the three strategies analyzed, the lowest-cost and lowest-profit strategy was the franchising strategy; it can be used when there is a shortage of financial resources. For “growth hacking” the expensive, but highly profitable strategy of direct investment taking into account currency hedging is applicable. Proceeding from the analysis of the influencing factors and legal conditions of the Russian Federation it is expedient to follow the strategy of average profitable export for ensuring company development. The practical application of strategies for organizations to enter foreign markets is a multifaceted object of research that requires a comprehensive analysis of various aspects of business expansion. The received results will help companies make weighed decisions when choosing the optimum strategy for expanding their business in the international market.

The Influence of Company Growth, Capital Structure, and Business Risk on Company Value with Company Size as a Moderating Variable in Property and Real Estate Sector Companies on the Indonesia Stock Exchange

This research aims to analyze the influence of company growth, capital structure, and business risk on company value. This research also aims to analyze company size in moderating the relationship between company growth, capital structure and business risk on company value. The population in this study were property and real estate sector companies listed on the Indonesia Stock Exchange from 2018 to 2022. The sampling technique in this study used purposive sampling, so the sample obtained were 33 companies. The analysis technique used in this research uses panel data regression analysis using EViews 13 as a data processing tool. The results of this research prove that capital structure has a positive effect on company value, while company growth and business risk have a negative effect on company value. Company size is not able to moderate the relationship between company growth, capital structure, and business risk on company value.

Resilience of rural micro-businesses in an adverse entrepreneurial environment: adapting to the energy crisis

PurposeThis study aims to examine the potential adaptability and resilience of rural micro-businesses within a business environment affected by successive crises, specifically drawing conclusions on crisis management, while simultaneously highlighting enterprises’ capabilities in managing the current energy crisis, basis the experiences and best practices that they themselves have gained previously.Design/methodology/approachConvenience sampling was applied, effectively identifying 18 micro-entrepreneurs in rural Greece. Subsequently, qualitative research was conducted through semi-structured in-depth interviews.FindingsRural micro-businesses have shown adaptability and resilience to both economic and health crises through financial support received and interventions implemented. However, different crises’ types carry different business risks. The energy crisis has led to business operation’s energy costs and raw material prices multiplying exponentially. Additionally, they received limited financial support causing them to respond to the energy crisis though concrete defensive strategies and innovative interventions.Research limitations/implicationsFuture research should examine local bodies and trade unions’ perception on the energy crisis’ impact towards rural entrepreneurship.Practical implicationsThe findings are useful to Greek and European policy-makers and rural micro-entrepreneurs as the experience of dealing with several previous crises can be a useful tool when dealing with current and future crises.Originality/valueThis paper adds to international literature on rural micro-businesses resilience, operating in crisis mode. Additionally, it constitutes novel research exclusively focused on the new challenges faced by rural micro-businesses during the recent energy crisis.