Issue №1, 2019

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An assessment of operational risks influence on enterprise investment attractiveness based on Arctic lng transportation

A. S. Kostylev, Northern (Arctic) Federal University named after M. V. Lomonosov (Arkhangelsk, Russia)

Full article 

DOI: 10.34130/2070-4992-2019-1-55-64

P. 55-64.

The article deals with risk management issues as it is essential part of internal control system which forms thorough corporate management. The corporate management is considered as a factor of enterprise investment attractiveness, apart from that it is noted that existing enterprise risk management system also serves as a factor of its investment attractiveness. The research objectives are to show the importance of operational risks assessment and to prove their influence on enterprise investment attractiveness. Based on annual reports of one of the shipping companies a correlation analysis is conducted using nonparametric tests. A strong positive correlation is established between amount of capital investments and number of operational risk assessments, and between amount of EBITDA and capital investments. Thus it is concluded that thorough operational risks assessment leads to capital efficiency. A linear regression model describing relationship between amount of capital investments and number of operational risks assessment is proposed, so that it can be used for KPI planning and further approvement by the Board. Taking into account the correlation above and operational risks conception, indicators to be controlled are recommended to Russian enterprises in addition to other enterprise risk management techniques. The research results can be used by the Board and managers in addition to corporate management and risk management techniques and for educational purposes while studying Management course.

Keywords: corporate management, risk management, investment attractiveness, operational risks, risk assessment

References

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For citation: Kostylev A. S. An assessment of operational risks influence on enterprise investment attractiveness based on arctic LNG transportation. Corporate Governance and Innovative Economic Development of the North: Bulletin of the Research Center of Corporate Law, Management and Venture Capital of Syktyvkar State University, 2019, no. 1, pp. 55–64. DOI: 10.34130/2070-4992-2019-1-55-64 (In Russian).