Research On The Correlation Between Directors' And Officers' Liability Insurance And Acquisition Outcomes

In recent years,with the speeding up of the globalization process,Mergers and acquisitions become the main way of enterprise development,and it has been gradually attention by practice and academics.Mergers and acquisitions as a high-risk activity,and it has a significant impact for business and management,Mergers and acquisitions will bring litigation risks to corporate and executives,corporate directors and executives will face a rigorous review and liability risks.As a kind of risk transfer mechanism,directors' and officers' liability insurance has developed in the domestic for many years,it can reduce the enterprise litigation risk effectively and promote the directors and officers are more positive to perform his duties. directors' and officers'liability insurance can make what kind of impact for Acquisition outcomes?Under the different merger type and merger's deal type,the relationship of directors' and officers'liability insurance and Acquisition outcomes will change?This problem deserves further discussion and research.This paper is based on the sample of Shanghai and Shenzhen A -share listed companies from 2009 to 2015,and it discusses and analyzes the relationship between directors' and officers' liability insurance and corporate performance.The empirical results shows that directors' and officers' liability insurance can improve the performance of M&A.Among them,comparing with the non-related acquisitions,o the enterprises in related acquisition, directors' and officers' liability insurance can enhance the acquisition outcomes;comparing with the all-cash deal,on the enterprises in stock deal, directors' and officers' liability insurance can enhance the acquisition outcomes..After a series of robustness tests,the conclusions of this paper did not change significantly.So this paper enriched the research contents of directors'and officers' liability insurance,and deepen the understanding of the company governance role of directors' and officers' liability insurance,this paper provide the empirical evidence for its promotion and development.