Directors' and Officers' Liability Insurance and Corporate Carbon Performance
Journal: Modern Economics & Management Forum DOI: 10.32629/memf.v6i2.3964
Abstract
Currently, global climate change is becoming increasingly severe. Under the urgent situation of global response to climate change, corporate carbon performance has become a key indicator to measure the ability of sustainable development and fulfillment of corporate social responsibility. As the core force in corporate strategic decision-making, directors and senior managers have important responsibilities in addressing corporate carbon risks and improving carbon performance. However, they face many uncertainties and legal risks in the course of fulfilling these responsibilities. Directors and officers liability insurance has emerged as an important enterprise risk management tool. Using the panel data of listed companies from 2013-2023 as the research samples, this paper empirically investigates the relationship between the directors' and officers' liability insurance and the carbon performance of enterprises and its mechanism of action, and the study shows that the directors' and officers' liability insurance has a significant positive contribution to the carbon performance of enterprises. Green technology innovation plays a mediating role in the relationship between directors' liability insurance and corporate carbon performance. Heterogeneity analysis reveals that directors' liability insurance has a more significant effect on carbon performance in non-state-owned enterprises than in state-owned enterprises.
Keywords
Carbon performance; Director's insurance; Green technology innovation; Financing constraints
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[2] LEE K T,CHOI J W.The characteristics of Korean firms purchasing directors'and officers'insurance[J].Korean Journal of Insurance, 2006, 74: 1-32.
[3] Hu Guoliu, Hu Jun. Director and executive liability insurance and corporate risk taking: theoretical path and empirical evidence [J]. Accounting Research, 2017, (5): 40-46.
[4] Li Conggang, Xu Rong. Insurance governance and corporate violations — The governance effect of director executive liability insurance [J]. Financial Research, 2020, (6):188-206.
[5] Bai Fuping, Shang Mengting, Huang Yujie. Director, Executive liability Insurance and corporate ESG performance: Power or resistance?[J]. Southern Finance, 2023, (11): 35-48.
[6] Zhang Ruigang, Yin Jingjing. The impact of director executive liability insurance on green innovation — the threshold effect based on financing constraints [J]. Accounting Monthly, 2023, 44(08): 143-150.
[7] Yan Huahong, Jiang Jie, Wu Qifu. Research on the impact of carbon performance on financial performance based on the analysis of property rights [J]. Mathematical Statistics and Management, 2019, 38(01): 94-104.
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