| Innovation is the source of a country’s economic development.Enterprise innovation is the core content of enterprise to enhance market competitiveness and determine enterprise development.It is also an important way to build an innovation-oriented country.In recent years,how to improve the innovation ability of enterprises has been a hot issue that enterprises continue to pay attention to.However,due to the high investment and high risk of innovation activities,enterprise managers are likely not willing to carry out enterprise innovation activities because of the existence of practice risk.Faced with this dilemma,how to break through the current situation and further enhance the enterprise innovation output is an urgent problem to be solved.As a special kind of liability insurance,the main motivation for enterprises to purchase directors’ and officers’ liability insurance is to distribute the claims caused by the management’s improper decisions,so as to avoid possible litigation risks.The experience of mature capital markets in Europe and America shows that the insurance has played a good role in corporate governance.However,the development of the insurance in China is very slow.With the continuous improvement of China’s capital market and legal system,the demand for enterprise innovation is increasing.It is particularly important to study whether directors’ and officers’ liability insurance can play a positive role in corporate governance under the special market environment in China.Based on the data of A-share listed companies in Shanghai and Shenzhen Stock Exchange from 2007 to 2018,this paper empirically explores the impact of directors’ and officers’ liability on enterprise innovation,and uses the mediating effect model to deeply study the mediating effect of risk-taking on the relationship between directors’ and officers’liability and enterprise innovation.The empirical results show that the purchase of the insurance can have a positive effect on enterprise innovation,and the insurance can promote enterprise innovation through its incentive and supervision function.Risk-taking plays an intermediary role in the relationship between the insurance and innovation output,which is an effective way for the insurance to promote enterprise innovation.In the further study,this paper selects the characteristics of enterprise heterogeneity and industry heterogeneity,and specifically examines the impact of five factors on the relationship between the insurance and enterprise innovation.The results show that compared with enterprises with low growth,non-high-tech enterprises,enterprises with high ownership concentration and enterprises with weak market competition,D&O Liability Insurance can play a better role in encouraging innovation in enterprises with high growth,high-tech enterprises,enterprises with low ownership concentration and enterprises with strong market competition.Compared with the current existing literature,this article examines the impact of the heterogeneity of corporate and industry characteristics on the relationship between director and liability insurance and corporate innovation,which can better expand related research.This paper also creatively uses the intermediary effect model.Based on the study of the relationship between directors’ and executives’ liability insurance and enterprise innovation,this paper introduces risk-taking as an intermediary variable,which clarifies an effective way of the insurance affecting enterprise innovation. |
