Research On The Impact Of Directors And Executives Liability Insurance On Investment And Financing Maturity Mismatc

A radical investment and financing strategy,known as "Short-term Loans and Long-term Investments",is characterized by a kind of financial alienation behavior:enterprises utilizing short-term debt funds to finance long-term investment projects that are not in line with their investment and financing maturity.This strategy of using long-term and short-term loan spreads can save financial costs for enterprises,but due to the violation of the principle of capital term matching,it may also make enterprises fall into financial risks,causing the crisis of capital chain rupture and even bankruptcy risk.Managers of businesses can enhance their short-term performance by making more "Short-term Loans and Long-term Investments" decisions,disregarding the long-term operational risks of the enterprise in favor of personal gain,which further exacerbates the mismatch of investment and financing maturity.As an emerging corporate governance mechanism to alleviate the practice risks of corporate directors,directors’ and officers’ liability insurance forms two governance effects of the supervisory incentive hypothesis and the opportunistic hypothesis,which can affect the mismatch of investment and financing maturity by affecting its psychological accounts and investment and financing decisions.This paper has both theoretical and practical value in exploring the influence of directors’ and officers’ liability insurance on the mismatch of investment and financing maturity.This paper takes the data of China’s A-share listed companies from 2007 to 2021 as the research sample,considering the impact of directors’ and officers’ liability insurance on the mismatch of investment and financing maturity and its role mechanism.The study shows that:(1)directors’ and officers’ liability insurance will aggravate the mismatch of investment and financing maturity;(2)By improving the managers’ overconfidence,directors’ and officers’ liability insurance aggravates the mismatch of investment and financing maturity,that means,the managers’ overconfidence plays a partial intermediary role between the two;(3)Further research shows that the longer the purchase time period of directors’ and officers’ liability insurance,the lower the marketization degree,in state-owned enterprises and with easy monetary policy conditions,the more significant the aggravating effect of officers’ liability insurance on the the mismatch of investment and financing maturity.After examining the economic consequences,it is found that the aggravating effect of the directors’ and officers’ liability insurance on the mismatch of investment and financing maturity will further increase the risk of enterprise operation.This paper provides relevant empirical evidence and practical enlightenment for improving the laws and regulations and the design of insurance contract,and strengthening the construction of corporate governance system and supervision mechanism.