The impact of D&O insurance on excess corporate leverage

IF 1.9 Q2 BUSINESS, FINANCE China Journal of Accounting Research Pub Date : 2022-12-01 DOI:10.1016/j.cjar.2022.100271
Jiamin Liu , Yalin Jiang , Shengdao Gan , Ran Chen
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引用次数: 1

Abstract

The governance effects of directors’ and officers’ liability insurance (D&O insurance), an important tool for risk diversification, are of strong concern in the capital market. Using a sample of Chinese A-share listed firms from 2009 to 2018, we examine the impact of D&O insurance on excess corporate leverage. We find that D&O insurance is negatively associated with excess corporate leverage and that this result is consistent with a series of robustness tests. Further analyses show that D&O insurance impedes excess corporate leverage mainly because of its effect on external monitoring. The effect is more pronounced for firms that are state-owned, have political connections and are located in provinces with low marketization than for other firms.

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董事责任保险对企业过度杠杆的影响
董事和高级管理人员责任保险作为风险分散的重要工具,其治理效果一直受到资本市场的关注。本文以2009 - 2018年中国a股上市公司为样本,研究了D&O保险对企业过度杠杆的影响。我们发现,D&O保险与企业杠杆过剩呈负相关,这一结果与一系列稳健性检验相一致。进一步分析表明,d&o保险阻碍企业过度杠杆的主要原因是其对外部监督的作用。与其他企业相比,国有企业、有政治关系的企业和位于市场化程度较低省份的企业的影响更为明显。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
4.70
自引率
0.00%
发文量
295
审稿时长
15 weeks
期刊介绍: The focus of the China Journal of Accounting Research is to publish theoretical and empirical research papers that use contemporary research methodologies to investigate issues about accounting, corporate finance, auditing and corporate governance in the Greater China region, countries related to the Belt and Road Initiative, and other emerging and developed markets. The Journal encourages the applications of economic and sociological theories to analyze and explain accounting issues within the legal and institutional framework, and to explore accounting issues under different capital markets accurately and succinctly. The published research articles of the Journal will enable scholars to extract relevant issues about accounting, corporate finance, auditing and corporate governance related to the capital markets and institutional environment.
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