Publication Type
Journal Article
Version
publishedVersion
Publication Date
2-2003
Abstract
This article suggests a rationale for firm risk management that has been largely ignored in financial economics literature. It presents an argument for harnessing the influence of a company’s stakeholders who, whether as employees, suppliers or customers, make a valuable investment specific to the company. Such investments are crucial for a firm’s competitive advantage, yet because they are firm-specific and therefore cannot be transformed or transferred, stakeholders are often concerned about the risks involved in making them. A company’s efforts to manage risk can therefore persuade stakeholders to make even greater firm-specific investments, bringing benefits to shareholders and stakeholders alike.
Discipline
Corporate Finance | Finance and Financial Management | Strategic Management Policy
Research Areas
Strategy and Organisation
Publication
Long Range Planning
Volume
36
Issue
1
First Page
49
Last Page
59
ISSN
0024-6301
Identifier
10.1016/S0024-6301(02)00203-0
Publisher
Elsevier
Citation
WANG, Heli; BARNEY, Jay B.; and REUER, Jeffrey J..
Stimulating firm-specific investment through risk management. (2003). Long Range Planning. 36, (1), 49-59.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/3457
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/S0024-6301(02)00203-0
Included in
Corporate Finance Commons, Finance and Financial Management Commons, Strategic Management Policy Commons