Directors' And Offers' Insurance,Internal Control And Enterprise Technology Innovation

Enterprise technology innovation has always been an important topic of concern in the theoretical and practical circles.Many scholars have studied the impact on innovation from the external institutional environment and internal governance structure.Then directors' and officers' insurance is regarded as an emerging governance mechanism.Does it have an impact on corporate technological innovation?Directors' and officers' insurance,also known as "D & O" insurance,refers to the insurance company's payment of personal compensation when an insured director or senior manager causes financial loss to others due to work negligence or improper behavior(not include malicious intent,breach of loyalty obligations,intentional false or misleading statements in the disclosure,or violations of the law)during the performance of his duties.Since its introduction into the Chinese capital market in 2002,its governance effect has been a controversial topic.Part of the literature started from the hypotheses such as “management incentives” and “external supervision”,and believed that directors' and offers' insurance played a good governance role.The insurance company will play the role of external supervision before and during underwriting,and it will transfer the management's performance risk,solve the worries of management,encourage the management to be diligent,bold and innovate,and help attract excellent management teams.Opponents believe that directors' and offers' insurance has stimulated moral hazard and aggravated opportunistic behavior,reduced legal liability of management,exacerbated agency problems,and increased the company's operating risk.Based on the clarification of related concepts,this thesis combines the theoretical foundations of insurance theory,corporate governance theory,and agency theory,and uses the data of Shanghai and Shenzhen A-share listed companies from 2008 to 2018 as a sample to empirically test directors' and offers' insurance and corporate technology.This paper also analyzes and tests the mediating role of the quality of internal control in enterprises.Further research was conducted on whether there is a difference in the impact of directors 'and officers' insurance on technological innovation of enterprises under different ownership properties and marketization levels.The research finds that:(1)Directors' and offers' insurance is significantly positively related to corporate technological innovation,and the introduction of directors' and offers' insurance is conducive to corporate technological innovation;(2)The quality of the company's internal control has played a part of the role of intermediary in the relationship between directors' and offers' insurance and corporate technology innovation;(3)Further research found that compared with state-owned enterprises,the introduction of directors' and offers' insurance by non-state-owned enterprises has a more significant role in promoting technological innovation in enterprises;(4)When the degree of marketization is different,in the regions with high marketization,the impact of directors' and offers' insurance on corporate technology innovation is promoted,while in regions with low marketization,directors' and offers' insurance will inhibit corporate technology innovation.The conclusions of this article have theoretical and practical significance.It examines the impact of the purchase of directors' and offers' insurance on corporate technological innovation,and study the role of internal control quality in the above relationship,enrich relevant literature research,and provide empirical evidence for improving corporate governance mechanisms.At the same time,it can provide reference for promoting the development of directors' and offers' insurance in China's capital market,improving the level of technological innovation of enterprises,and accelerating the construction of an innovative country.The research on the nature of different property rights and the level of marketization provides a certain practical inspiration for accelerating the reform of ownership,marketization process,and under what circumstances listed companies choose to buy directors' and officers' insurance.