Operational Risk and the Notion of Company’s Financial Sustainability
摘要
Due to the critical importance of the industrial sector toward the Jordanian economy, the industrial sector may confront several risks particularly operational risks, that may adversely impact its financial sustainability. The study came to examine the impact of operational risk on industrial sector financial sustainability. Listed Pharmaceutical and medical companies and Listed mining and extraction companies were the study sample, for the last 20 years (2002–2021). The study employed the Ordinary Least Squares regression (OLS) test. Results implied that, for pharmaceutical and medical industries sector operational risk has reflected no significant impact on financial sustainability indicator (MV/BV), but regarding operational risk impact on RET/REV, results demonstrated statistical negative significant impact. Referring to mining and extraction industries sector, the results indicated that there is a negative statistical impact of operational risks on both indicators of financial sustainability. The study recommends that companies’ management are required to perform timely risk evaluation, also strong control should be exercised for the purpose of mitigating operational risk. Also, proper operational risk management system should be adopted to evaluate, control, and mitigate such risks in the future.