Will Insurance System Design Affect Corporate Internationalization Strategy Evidences from the Liability Insurance of Directors and Executives

Abstract

Abstract: China is now committed to its high-quality development with high-level opening up. How to realize the transformation of China’ enterprises from“bringing in”to“going out”along a fast and stable path is an important practical issue. Taking the 2010-2019 Chinese A-share listed companies as the research sample, this paper conducts an empirical analysis. The results show that the directors’ and officers’ liability insurance could significantly improve the internationalization level of the enterprises. The results of the mechanism analysis show that the directors’ and officers’ liability insurance can enhance the corporate internationalization level by suppressing the risk aversion tendency of the executives and improving the corporate risk-taking ability. The findings of further analysis show that the directors’ and officers’ liability insurance has a significant incremental effect on the corporate value after the improvement of their internationalization level, which indicates that the directors’ and officers’ liability insurance has indeed improved the ability to prevent and respond to international risks of the enterprises.

Key words: directors' and officers' liability insurance, internationalization, risk sharing

CLC Number:

TANG Xue-song, LIAO Wang, LIAO Qiang. Will Insurance System Design Affect Corporate Internationalization Strategy Evidences from the Liability Insurance of Directors and Executives[J]. Contemporary Finance & Economics, 2021, 0(12): 77-89.

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