| In recent years,the development of the financial market is over-inflated,and the real economy continues to be in the doldrums.The holding of financial assets by enterprises in China has gradually become a common phenomenon,and the proportion of financial assets held by increasingly entity enterprises and the proportion of profits from financial channels have been rising,and the “from real to virtual” phenomenon has become more and more common.Studies have confirmed that the imbalance between the real economy and the virtual economy will exacerbate the risk linkage between the corporate sector and the financial markets,increasing the risk of stock price collapse and business risks.This phenomenon has attracted great attention from academia and relevant departments,and preventing the economy from “from real to virtual” has become a practical problem for China;General Secretary Xi Jinping also pointed out in 2021 that “we should learn from the lessons of some Western countries economy being diverted out of the real economy and keep the real economy growing”.Therefore,how to prevent the real economy from over-allocating financial assets and promote the long-term healthy development of the real economy has become a key concern for both theoretical and practical areas.As a corporate governance mechanism and risk management tool,directors’ and officers’ liability insurance(D.O.Insurance)transfers the liability and litigation risk faced by directors,supervisors and executives due to their misconduct in performing their duties;at the same time,insurance companies will actively perform their investigation and supervision duties because they directly bear the risk of corporate decision makers.At the same time,with the implementation of the new Securities Law and the Company Law,directors and executives will bear more responsibilities and risks at work,which will certainly stimulate the demand for D.O.insurance.Under the circumstances of information asymmetry,the D.O.insurance has a signaling effect that can also influence managers’ investment behavior such as allocation of financial assets.Therefore,this paper explores the impact of D.O.insurance on corporate financial allocation from the perspective of D.O.insurance.Based on precautionary savings theory,financing constraint theory,information asymmetry theory,principal-agent theory and signaling theory,this paper puts forward the main hypothesis that D.O.insurance will send bad signals to the outside world,leading to an increase in the degree of financing constraints faced by enterprises,and then inhibit the allocation of corporate financial assets.This paper takes the data of companies from 2010-2021 as the sample.In terms of research content,this paper first introduces the existing background,compares the existing studies,elaborates the theoretical basis of this paper and the possible mechanism of action,and proposes the research hypothesis of this paper accordingly.Based on the framework,this paper uses fixed effect model to analyze the impact of D.O.insurance on the allocation of financial assets of enterprises,and divides the sample of enterprises into state-owned enterprises and non-state-owned enterprises for heterogeneity analysis,and uses financing constraints as a mediating variable for mediating effect analysis.This paper uses the PSM method to conduct robustness tests on the empirical results.Finally,based on the research findings,this paper makes suggestions from several aspects of relevant policy improvement,enterprise risk assessment and D.O.insurance product design. |
