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Directors' and officers' liability insurance and corporate misconduct: Evidence from China.
- Source :
- Applied Economics; Apr2023, Vol. 55 Issue 20, p2349-2365, 17p, 11 Charts
- Publication Year :
- 2023
-
Abstract
- This study examines whether directors' and officers' liability insurance (D&O insurance) plays a governance role in the Chinese capital market. We hypothesize and find that D&O insurance restrains corporate misconduct and that this phenomenon is much more significant in state-owned enterprises (SOEs) than in non-state-owned enterprises (non-SOEs). We think purchasing of D&O insurance can import supervisors to mitigate agency costs caused by owner absence. When agency costs are high, SOEs with D&O insurance experience less corporate misconduct. Our study also finds that when the agency problem caused by owner absence is more serious in SOEs, the role of D&O insurance in corporate governance becomes increasingly important. [ABSTRACT FROM AUTHOR]
- Subjects :
- EXECUTIVES' liability insurance
BUSINESS insurance
AGENCY costs
CAPITAL market
Subjects
Details
- Language :
- English
- ISSN :
- 00036846
- Volume :
- 55
- Issue :
- 20
- Database :
- Complementary Index
- Journal :
- Applied Economics
- Publication Type :
- Academic Journal
- Accession number :
- 162536232
- Full Text :
- https://doi.org/10.1080/00036846.2023.2186363