Directors’ And Officers’ Liability Insurance,Internal Control And Corporate Green Innovation

In recent years,green innovation has become an important tool to promote high-quality economic and social development.How to promote corporate green innovation is currently a key topic of concern for many scholars and corporate managers.In this paper,we choose the emerging governance mechanism of directors’ and officers’ liability insurance to study its effect on corporate green innovation.This article first elaborates the relationship between directors’ liability insurance,enterprise internal control,and enterprise green innovation based on relevant theoretical foundations such as principal-agent theory,then selects A-share listed manufacturing companies in Shanghai and Shenzhen from 2016 to 2020 as the research sample and establishes panel data model to empirically study the relationship between directors’ executive liability insurance and corporate green innovation,focusing on the analysis and testing of the mediating role of corporate internal control in this influence process.The study found that:(1)Taking out directors’ and officers’ liability insurance can drive green innovation in your business;(2)Taking out directors’ and officers’ liability insurance can improve the quality of internal controls;(3)Taking out directors’ and officers’ liability insurance can enhance corporate green innovation by improving the quality of internal controls;(4)Director’s liability insurance is more effective in promoting green innovation in SOEs than in non-SOEs;(5)Director’s and officer’s liability insurance is more effective in promoting green innovation in dual-employer companies than dual-employer companies.The research in this article provides a useful supplement to the existing literature and provides empirical evidence for accelerating the popularization of director’s liability insurance in China’s market,improving the governance mechanism of manufacturing enterprises,and encouraging green innovation.