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Exploring the Impact of Market and Price Risk Management on Financial Risk Management: The Mediating Role of Institutional Risk Management in Ghana's Agricultural Sector.

Year: 2025

Type: article

Abstract: This study investigates the influence of Market and Price Risk Management (MPRM) on Financial Risk Management (FRM) by considering Institutional Risk Management (IRM) as a mediating variable within Ghana's agricultural sector. This study evaluates the effectiveness of risk-management strategies in reducing financial instability among stakeholders. A quantitative research design was utilised, employing structural equation modelling (SEM) to analyse survey data from agricultural firms and financial institutions. These findings indicate that MPRM significantly improves FRM, suggesting that effective market risk management bolsters financial stability. Furthermore, IRM exhibited a partial mediating effect, indicating that strong institutional frameworks enhance financial resilience. The findings indicate that the role of institutions in mitigating financial risk is essential, supporting Institutional Risk Theory and Risk Management Theory while contesting Agency Theory, which emphasises shareholder-centric risk strategies. This study presents originality through the integration of institutional risk as a mediating mechanism, providing new insights into the risk dynamics within emerging economies. Practical implications include the enhancement of regulatory policies, the improvement of financial literacy programs, and the adoption of structured hedging strategies to stabilise agricultural financial markets. These findings enhance the discussion of risk management policies, regulatory interventions, and financial sustainability in developing economies.

Source: Zenodo (CERN European Organization for Nuclear Research)

DOI: 10.5281/zenodo.14993063

Authors: Dexter Senanu Kofi Hewlett A, Kojo Essel-Mensah, Janet Owusu Asabre

Institutions: University of Professional Studies, University of the Free State, International Institute of Tropical Agriculture, International Institute of Tropical Agriculture, International Institute of Tropical Agriculture, International Institute of Tropical Agriculture, International Institute of Tropical Agriculture

Language: English

Topic: Risk Management in Financial Firms

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Zero hunger

Open Access status: green

OpenAlex ID: W6911932640

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