Using hand-collected data on purchases of D&O insurance by Chinese listed firms for the period from 2008 to 2019,we empirically find that D&O insurance negatively associates with credit spreads.The negative re...Using hand-collected data on purchases of D&O insurance by Chinese listed firms for the period from 2008 to 2019,we empirically find that D&O insurance negatively associates with credit spreads.The negative relationship still holds after conducting a series of robustness tests and is not driven by the eyeball effect.We also show that D&O insurance can reduce credit spreads via the channels of internal controls,external monitoring,information asymmetry and default risk.Moreover,the negative effect of D&O insurance on credit spreads is more pronounced for non-state-owned firms,those located in regions with a low level of marketization or that employ rating agencies with a bad reputation.Our study complements the literature on the credit spreads and corporate governance.展开更多
基金supported by the National Natural Science Foundation of China(No.72072012,71672007,71972010 and 71972011)the National Social Science Fund of China(No.18BGL090)
文摘Using hand-collected data on purchases of D&O insurance by Chinese listed firms for the period from 2008 to 2019,we empirically find that D&O insurance negatively associates with credit spreads.The negative relationship still holds after conducting a series of robustness tests and is not driven by the eyeball effect.We also show that D&O insurance can reduce credit spreads via the channels of internal controls,external monitoring,information asymmetry and default risk.Moreover,the negative effect of D&O insurance on credit spreads is more pronounced for non-state-owned firms,those located in regions with a low level of marketization or that employ rating agencies with a bad reputation.Our study complements the literature on the credit spreads and corporate governance.
