The relationship between innovation capability and profitability: The mediating role of enterprise risk management in Amman Stock Exchange (ASE)

Qais Yaser Saleh, Ebrahim Mansour, Mohammad Yousef Altarawneh, Esam Emad Ghassab

Article ID: 7430
Vol 8, Issue 13, 2024

VIEWS - 83 (Abstract) 13 (PDF)

Abstract


In the face of growing competition, industrial and commercial firms need more effective strategies to gain competitive advantages. This study investigates the role of enterprise risk management (ERM) as a mediator in highlighting the significance of innovation capability on profitability in industrial and commercial firms listed on the Amman Stock Exchange (ASE). Data were collected from 244 respondents using a standardized questionnaire and analyzed with SPSS software. The results indicate that the innovation capability has an impact on profitability in industrial and commercial firms, as well as their ERM practices. Additionally, ERM mediates the relationship between innovation capability and profitability. Firms that adopt distinctive innovation strategies tend to maintain formal ERM strategies, which in turn enhance market superiority and profitability. This research offers some significant managerial ramifications that may be essential for business owners, executives, and decision-makers involved in the development of firms.


Keywords


innovation capability; enterprise risk management; profitability; sustainability; management innovation; financial performance; risk management strategies

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