دانلود رایگان مقاله انگلیسی آگاهی، تعیین کننده ها و ارزش مدیریت ریسک اعتبار: صنعت بانکداری و بیمه - الزویر 2018

ABSTRACT

The aim of this paper is to empirically study reputation risk management in the US and European banking and insurance industry, which has become increasingly important in recent years. We first use a text mining approach and find that the awareness of reputation risk (management) as reflected in annual reports has increased during the last ten years and that it has gained in importance relative to other risks. Furthermore, we provide the first empirical study of the determinants and value of reputation risk management. Our results show that larger firms, as well as firms that are located in Europe and have a higher awareness of their reputation, are significantly more likely to implement a reputation risk management program. Finally, we obtain initial indications of the value-relevance of reputation risk management.

4. Summary

This article pursued three research goals concerning reputation risk and its management, using 820 firm-year observations of US and European banking and insurance companies. We first investigated the development of the awareness of reputation risks by conducting a text mining analysis of annual reports from 2006 to 2015 and by examining the frequencies of the terms ‗reputation‘, ‗reputation(al) risk‘ and ‗reputation(al) risk management‘. We also compared the differences between industries and regions and examined the relevance of reputation risk as compared to other risks in the annual reports by calculating relative frequencies concerning the term ‗risk‘ in general. To the best of our knowledge, this is the first paper to empirically identify firm characteristics and determinants for the implementation of a reputation risk management program and to investigate the value-relevance of reputation risk management using regression analyses.

The results with regard to the awareness of reputation risk (management) based on the text mining analysis show that the sum of the three examined terms (‗reputation‘, ‗reputation(al) risk‘ and ‗reputation(al) risk management‘) more than tripled between 2006 and 2015. This finding implies that various developments, such as higher stakeholder expectation and engagement and the impact of social media, which make reputation more volatile, are reflected in the perceptions of firms. The increasing trend not only holds for the absolute number of uses, but also for the frequency relative to the total number of words of the disclosure, indicating that the growth is not only due to generally longer annual reports, but that the awareness and relevance of reputation and its risks did indeed increase. We further observe that the share of ‗reputation(al) risk (management)‘ in the term ‗risk (management)‘ in general increased, indicating that reputation risk also gained in relevance relative to other risk categories. Finally, the results split by subsamples imply that the differences concerning the awareness of reputation risks as reflected in the annual reports are more pronounced between industries than between regions.