出版社：LLC “Consulting Publishing Company “Business Perspectives”
摘要：The author examines directors'and officers'(D&O)insurance coverage affects a firm's investment decisions.Once managers mitigate their personal legal liability through D&O insurance coverage,their behaviors will be more opportunistic.The author finds that managers are more likely to over-invest when their personal legal liability is covered by abnormally high level of D&O insurance coverage.The author also finds that over-investing firms with excess D&O insurance coverage appear to have poor investment decisions that result in inferior subsequent performance.The author further finds that managers with excess D&O insurance coverage tend to over-invest in R&D. The authors'results are consistent with the argument that the agency conflicts are aggravated by excess D&O insurance coverage which provides the managements with more room to pursuit private personal benefits via inefficient investments decisions.
