Legal Environment,Property Right Nature And D&O Liabiliyt Insurance

The further improvement of domestic and foreign legal system and the stricter internal and external supervision of enterprises make directors and officers of enterprises face stricter supervision and higher professional risks.As a tool to mitigate the professional risks of directors and officers,directors' and officers liability insurance has entered the market.As the legal environment is the soil for the survival and development of all market players,the study of the relationship between law and finance is also one of the hot topics in the field of corporate finance.In order to study the obstacles to the development of directors' and officers' liability insurance,it takes the legal environment and the nature of property rights of enterprises as the main explanatory variables,and studies the impact of the legal environment and the nature of property rights of enterprises on the purchase behavior of directors'and officers' liability insurance.With the help of the impact of the legal environment on the financing cost and performance of enterprises,this study deduces the impact of directors' and officers'liability insurance on enterprises.Based on Institutional Economics and principal-agent theory,it constructs the hypothesis of the relationship between legal environment and directors' and officers'liability insurance,the nature of property rights and directors' and officers' liability insurance.Specifically,using the data of A-share listed companies in China from 2008 to 2014,we use the binary selection model to test the research hypothesis.It finds two points:first,in areas with good legal environment,enterprises tend to buy directors' and officers' liability insurance;second,compared with non-state-owned enterprises,state-owned enterprises tend to buy directors' and officers' liability insurance.The results show that good legal environment and directors' and officers' liability insurance are mutually substituted,and directors'and officers'liability insurance plays more role of "external supervision".The results are still robust after robustness tests of grouping regression,controlling the fixed age effect of the company and controlling the impact of economic environment.Based on it,some corresponding suggestions are putting forward:first,to improve the legal level of our country,speed up the improvement of the Company Law and the Securities Law,strengthen the supervision of the market,improve the legal system and shorten the legal revision cycle;second,to make directors' and officers' liability insurance more localized,strengthen the depth of publicity,control moral hazard in advance,integrate risk,set reasonable rates,and share big data to solve the problem of information asymmetry,etc.Third,accelerate the pace of state-owned enterprises reform and build a more stringent monitoring mechanism.