| Stock price collapse will bring many adverse consequences,which will not only affect the wealth level of investors,but also affect the stable development of capital market.Therefore,it is necessary to study the causes of stock price collapse risk.Good corporate governance mechanism is an important way to reduce the risk of stock price collapse.As a new governance mechanism,the directors’and officers’liability insurance has gradually attracted the attention of scholars.The directors’and officers’liability insurance is a kind of professional liability insurance purchased by the enterprise.When its directors,supervisors and senior managers have negligence or misconduct in the process of performing their duties and are investigated for personal compensation liability,the insurance company shall bear the relevant civil compensation expenses.At present,scholars mainly study the governance effect of this kind of insurance in China’s emerging markets,but the research conclusions are inconsistent.Therefore,the research on the governance effect of this kind of insurance has theoretical and practical significance.We choose A-share listed companies in Shanghai and Shenzhen from 2004 to 2020 as a sample to study the impact of the company’s purchase of directors’and officers’liability insurance on the risk of stock price collapse,and explore the specific path of this insurance to affect the risk of stock price collapse.It is found that agency cost,inefficient investment and accounting information quality play a partial intermediary role between them.It also analyzes the impact of internal control and the integration of two positions on the relationship between this insurance and stock price collapse risk.In addition,this dissertation also carries out robustness tests such as propensity score matching method,Heckman two-stage method,variable index replacement and sample interval replacement,so as to ensure the reliability of the conclusion.The conclusions of this dissertation are as follows:firstly,directors’and officers’liability insurance can play a good governance effect and reduce the risk of stock price collapse.Secondly,the test results of intermediary effect show that the insurance can reduce the risk of stock price collapse by reducing agency costs,alleviating inefficient investment and improving the quality of accounting information.Finally,the moderating effect shows that the inhibitory effect of the insurance on stock price collapse risk is more significant when the internal control is weak and the two positions are separated.This dissertation enriches the relevant research on the governance effect of directors’ and officers’ liability insurance.On the one hand,it provides empirical evidence for the existing research,which is conducive to improving the company’s attention to the insurance and promoting the development of the insurance in China;On the other hand,this dissertation also provides an effective path to reduce the risk of stock price collapse,which is conducive to promoting the improvement of relevant laws and systems. |
