| Innovation is an important driver of economic development and a key factor in business competitiveness,playing a key role in both macroeconomic growth and micro-enterprise competitiveness.By taking the lead in innovation,firms can play a leading role in accelerating economic development.However,innovation comes with opportunity costs and risks,and managers’ appetite for risk can influence their decision to innovate.Directors’ liability insurance,as a risk mechanism,is used as a management tool to provide management with occupational risk insurance,thereby increasing the firm’s risk tolerance and managers’ willingness to innovate,which in turn influences the firm’s innovation decisions.On this basis,this paper selects Shanghai and Shenzhen A-share listed companies from2010 to 2020 as research samples,uses the fixed-effect model to empirically test the effect and mechanism of directors’ liability insurance on corporate innovation,further investigates the influence of directors’ liability insurance on different forms of innovation under the heterogeneity of enterprises and industries,and studies the intermediary mechanism of internal control.The main findings are as follows:(1)Director’s liability insurance can reduce the career risks of directors,thus promoting enterprise innovation.(2)Based on the heterogeneity of enterprises and industries,the further analysis shows that compared with non-state-owned enterprises,director’s liability insurance significantly improves the innovation level of stateowned enterprises;Compared with non-manufacturing industry,directors’ liability insurance has significantly improved the level of innovation in manufacturing industry.(3)The intermediary mechanism test found that internal control played a partial intermediary role between directors’ and executives’ liability insurance and innovation.By improving the quality of internal control of listed companies,director and executive liability insurance can promote the improvement of enterprise innovation level.The research of this paper will provide theoretical basis and policy reference for the government and enterprises to improve the director’s liability insurance system and explore the way of enterprise innovation.On the one hand,the government needs to improve the relevant system of director’s liability insurance;On the other hand,enterprises should improve the governance mechanism;In addition,enterprises should clarify the internal conditions of enterprises,establish a reasonable internal management mechanism;Fourth,enterprises should flexibly respond to changes in the external environment and establish a scientific decision-making mechanism. |
