Property Right,D&O Insurance And The Value Of Cash Holdings

With the development of economic globalization and network information technology,enterprises face complex internal and external environment.The business risk of enterprises has increased sharply,and the occupational risks faced by directors and senior managers have increased significantly.In order to effectively solve the problems of the company directors and executives participating in the management activities,the director's liability insurance is introduced as an important hedge tool for corporate governance.However,whether it is helpful to improve the corporate governance and to improve the value of the firm's cash holding,or to aggravate the executive's opportunism behavior and to damage the value of the cash holding of the enterprise,is yet to be analyzed theoretically and empirically.In addition,when studying the problems of Chinese enterprises,we should not ignore the unique nature of property rights.Therefore,it is necessary to further explore whether the impact of directors' liability insurance on the value of cash holdings will be changed in accordance with the special institutional background of our country.This paper selects 11147 observation values of Shanghai and Shenzhen A shares listed companies as samples for 2009-2016 years as samples.The methods of descriptive statistics,differential test,VIF test,regression analysis and robustness test are used in this paper.From the perspective of D&O Insurance,this paper studies the influence of directors' liability insurance on the value of corporate cash holdings,and further refines the research on the property of the enterprise.Finally,the following conclusions are drawn.Firstly,as a whole,liability insurance for directors' senior managers can help to raise the value of cash holdings and exert certain governance effects.Secondly,due to the serious problem of "tunnel effect"in state-owned enterprises,to a certain extent,it will inhibit the positive effect of directors'liability insurance on the value of cash holdings.The conclusion not only enriches the related research on Directors' liability insurance,but also provides reference for listed companies to decide whether to buy directors' liability insurance.For investors,it is also possible to select investment objectives through the purchase of directors' liability insurance for directors.At the end of this paper,we put forward the countermeasures and suggestions to optimize the corporate governance and improve the directors' liability insurance system from four aspects,such as the company level,the regulatory level,the insurance company level and the system level.