臺灣博碩士論文加值系統

此論文包含三大部分。第一部分探討董監事暨重要職員責任保險(D&;O保險)的需求因素與公司治理等企業特徵間的關係，配合2003-2007年台灣上市上櫃公司的資料，研究影響公司是否購買D&;O保險、保險限額與保險費的決策因素。實證結果證明，大型公司較需要D&;O保險保障，且公司的董監事與利害關係人間存在代理成本問題。本文亦發現董監事獨立性等公司治理因素，對D&;O保險購買行為有顯著影響，再則，公司的成長性及經理人風險趨避態度，都會影響保險限額的決定。本文結論進一步顯示訴訟風險對保險限額的決定有正向顯著的影響，而財務風險對D&;O保險需求亦有若干影響力。第二及第三部分則進一步探討董監事暨重要職員責任保險對公司的行為或策略是否有影響。實證結果顯示D&;O保險確實會影響公司風險承擔策略及公司財報方法的穩健性。

This thesis is comprised of three essays on directors’ and officers’ (D&O) liability insurance, one interesting but little explored research area. Based on an unbalanced panel data set of public Taiwanese corporations in years 2003-2007, the first essay investigates the relationship between directors’ and officers’ (D&O) insurance demand and firm characteristics, especially corporate governance. The results suggest that large firms are more likely to purchase D&O insurance, and that there exists agency cost between directors/officers and stakeholders. The findings indicate that corporate governance, such as board independence, has an important impact on D&O insurance demand. Besides, the results show that growth opportunity or managerial risk aversion can affect the D&O insurance coverage amount. The litigation risk also has a positive and significant impact on the D&O insurance amount, and bankruptcy risk weakly influences the D&O insurance demand.
In the second essay, I provide evidence regarding corporate business strategy by investigating the relation between directors’ and officers’ (D&O) insurance and risk taking behavior. This essay tries to test (a) whether firms are more active to adopt risk-taking strategies when their directors and top managers are covered by D&O insurance coverage; (b) whether the quality of corporate governance has influence on firm’s risk-taking behavior; and (c) whether insurers can distinguish D&O insurance purchases decision driven by managerial risk-taking behavior and charge adequate premium rate for such behavior. The empirical evidence suggests that D&O insurance coverage has a positive impact on firm risk-taking behavior. In addition, the results indicate that board composition may remarkably influence corporate risk-taking behavior. The preliminary findings also show that insurers can assess the induced risk-taking behavior ex ante and charge adequate premiums rate accordingly.
In the third essay, I investigate whether the legal liability coverage result in the propensity of less conservatism and aggressive managerial behavior/strategy. More specifically, this study tests managerial opportunism behavior by examining whether the purchase of D&O insurance coverage is associated with more aggressive financial reporting strategy (i.e., less accounting conservatism). The empirical evidence suggests that D&O liability insurance purchase decision is positively associated with accounting conservatism. That is, firms with insurance coverage tend to recognize bad news in a timely manner, i.e. more earning conservatism. However, there is no significant relation between accounting conservatism and D&O insurance amount. In addition, the evidence shows that firms with strong board structure recognize good news faster than those with weak governance structure.

Abstract 2
Table of Contents 4
List of Tables 5
Background of Research 7
Essay 1
The Demand for Directors’ and Officers’ Insurance
1. Introduction 11
2. Literature Review 13
3. Hypotheses Development and Determinants of D&O Insurance 17
4. Research Design 20
5. Results 24
6. Conclusions 31
References 35
APPENDIX 1 45
Essay 2
The Relationship between Directors’ and Officers’ Liability Insurance
and Firm Risk Taking
1. Introduction 52
2. Literature Review 56
3. Hypotheses Development 59
4. Data, Variables, and Research Design 61
5. Empirical Results 66
6. Conclusions 75
References 78
APPENDIX 2 93
Essay 3
Financial Reporting Incentives for Conservative Accounting:
The Influence of Directors’ and Officers’ Liability Insurance
1. Introduction 98
2. Literature Review 101
3. Hypotheses Development 105
4. Research Design and Data 107
5. Empirical Results 113
6. Conclusions 120
References 123
APPENDIX 3 147
Concluding Remarks 148

Agrawal, A. and S. Chada, 2005, Corporate Governance and Accounting Scandals,
Journal of Law and Economics 48: 371-406.

Baker, T. and S. J. Griffith, 2007, Predicting Corporate Governance Risk: Evidence
from the Directors’ and Officers’ Liability Insurance Market, University of Chicago
Law Review 74: 487-544.

Berger, P. G., E. Ofek and D. Yermack, 1997, Managerial Entrenchment and Capital
Structure Decisions, Journal of Finance 52: 1411-1438.

Boubakri, N. and N. Ghalleb, 2008, Does Mandatory Disclosure of Directors’ and
Officers’ Liability Insurance Curb Managerial Opportunism? Evident from the
Canadian Secondary Market, working paper, University of Montreal.

Boubakri, N., M. Boyer and N. Ghalleb, 2008, Mnagerial Opportunism in Accounting
Choice: Evidence from Directors’ and Officers’ Liability Insurance Purchases,
working paper, University of Montreal.

Boumosleh, A., 2005, Director Compensation and Board Effectiveness, working paper, University of Alabama.

Boyer, M., 2004, Is the Demand for Corporate Insurance a Habit? Evidence from
Directors’ and Officers’ Insurance,” CIRANO Working Paper #2004s-33, Canada.

Boyer, M. and M. Delvaux-Derome, 2002, The Demand for Directors’ and Officers’
Insurance in Canada, CIRANO Working Paper #2002s-72, Canada.

Burns, N., S. Kedia and M. Lipson, 2006, The Effects of Institutional Ownership and
Monitoring: Evidence from Financial Restatements, working paper, University of
Virginia.

Cao, Z. and G. Narayanamoorthy, 2009, The Effect of Litigation Risk on
Management Earnings Forecasts, working paper, University of Washington.

Carpenter, M. A., T.G. Pollock and M. M. Leary, 2003, Testing a Model of Reasoned
Risk-Taking: Governance, the Experience of Principals and Agents, and Global
Strategy in High-Technology IPO Firms, Strategic Management Journal
24(September), 803-820.

Chalmers, J. M.., L. Y. Dann and J. Harford, 2002, Managerial Opportunism? Evidence from Directors’ and Officers’ Insurance Purchases, Journal of Finance 57: 609-639.

Chen, C. R., T. L. Steiner and A. M. White, 2001, Risk Taking Behaviour and Managerial Ownership in the United States Life Insurance Industry, Applied Financial Economics 11: 165-171.

Cheng, S., 2008, Board Size and the Variability of Corporate Performance, Journal of Financial Economics 87:157-176.

Chung, H. H., J. P. Wynn and H. Yi, 2008, Managerial Opportunism, Legal Liability Rule, and Audit Pricing, Working paper, Arizona State University–West.

Coles, J. L., N. D. Daniel and L. Naveen, 2006, Managerial Incentives and Risk-Taking, Journal of Financial Economics 79: 431-468.

Core, J. E., 1997, On the Corporate Demand for Directors’ and Officers’ Insurance, The Journal of Risk and Insurance 64: 63-87.

Core, J. E., 2000, The Directors’ and Officers’ Insurance Premium: an Outside Assessment of the Quality of Corporate Governance, The Journal of Law Economics, & Organization 16: 449-477.

Cornett, M. M., A. J. Marcus and H. Tehranian, 2008, Corporate Governance and Pay-for-Performance: The Impact of Earnings Management, Journal of Financial Economics 87: 357-373.

Esty, B. C., 1997, Organizational Form and Risk Taking in the Savings and Loan Industry, Journal of Financial Economic, 44: 25-55.

Gao, L. and P. S. Sudarsanam, 2005, Executive Compensation, Hubris, Corporate Governance: Impact on Managerial Risk Taking and Value Creation in UK High-tech and Low-tech Acquisitions, working paper, Cranfield University.

Gebhardt, W. R., C. M. Lee and B. Swaminathan, 2001, Toward an implied cost of Capital, Journal of Accounting Research 39: 135–176.

Gillan, S. L. and C. Panasian, 2008, What Matters in Corporate Governance? Evidence from Directors’ and Officers’ Liability Insurance Market, working paper, Texas Tech University.

Greene, W., 1999, Econometric Analysis, Prentice Hall International, Englewood Cliffs, NJ.

Griffin, D., K. Li, H. Yue and L. Zhao, 2009, Cultural Values and Corporate Risk-Taking,” working paper, http://ssrn.com/abstract=1362163.

Guay, W. R., 1999, The sensitivity of CEO Wealth to Equity Risk: An Analysis of the Magnitude and Determinants, Journal of Financial Economics 53: 43-71.

Hermalin, B. E. and M. S. Weisbach, 1998, Endogenously chosen boards of directors and their monitoring of the CEO, American Economic Review 88: 96-118.

Holderness, C. G., 1990, Liability Insurers as Corporate Monitors, International Review of Law and Economics 10: 115-129.

Hill, C. W. L. and S. A. Shell, 1988, External Control, Corporate Strategy, and Firm Performance in Research-intensive Industries, Strategic Management Journal 9: 577-590.

Jensen, M. C., 1993, The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems, Journal of Finance 48: 831-880.

Jensen, M. C. and W. H. Meckling, 1976, Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure, Journal of Financial Economics 3: 305-360.

John, K., L. Litvo and B. Yeung, 2008, Corporate Governance and Risk-Taking, Journal of Finance 63: 1679-1728.

Kaltchev, G. D., 2004, The Demand for Directors' and Officers' Liability Insurance by US Public Companies, Working paper, Southern Methodist University.

Kaltchev, G. D., 2006, Dynamic Panel Models with Directors’ and Officers’ Liability Insurance Data, Panel Data Econometrics 351-360.

Kim, I. Y., 2005, Directors’ and Officers’ Insurance and Opportunism in Accounting Choice, working paper, Duke University.

Mayers, D. and C. W. Smith, 1982, On the corporate demand for insurance, Journal of Business 55: 281-296.

Laeven, L. and R. Levine, 2008, Bank Governance, Regulation and Risk Taking, working paper, http://ssrn.com/abstract=1142967.

Low, A., 2009, Managerial Risk-Taking Behavior and Equity-Based Compensation, Journal of Financial Economics 92: 470-490.

Osma, B. G. and B. Gill-de-Albornoz Noguer, 2007, The Effect of the Board Composition and its Monitoring Committees on Earnings Management: evidence from Spain, Corporate Governance-An International Review 15: 1413-1428.

Pathan, S., 2009, Strong Boards, CEO Power and Bank Risk-Taking, Journal of Banking and Finance 33: 1340-1350.

Shleifer, A. and R. W. Vishny, 1986, Larger Shareholders and Corporate Control, Journal of Polictical Economy 94: 461-488.

Smith, C. W. and R. M. Stulze, 1985, The Determinants of Firms’ Hedging Policies. Journal of Financial and Quantitative Analysis 20: 391-405.

Tillinghast-Towers Perrin (2004), Understanding the Unexpected, the 2004 Directors and Officers Survey Report, a business of Towers Perrin, 2004.

Vafeas, N., 1999, Shareholder Lawsuits and Ownership Structure, The Journal of Applied Business Research 16: 35-50.

Ward, J. L., 1997, Growing the Family Business: Special Challenges and Best Pactices, Family Business Review 10: 323-337.

Williams, J., 1987, Perquisities, Risk, and Capital Structure, Journal of Finance, 42: 29-48.

Wiseman, R. M. and L. R. Gomez-Mejia, 1998, A Behavioral Agency Model of Managerial Risk Taking, Academy of Management Review 23: 133-153.

Wright, P., S. P. Ferris, A. Sarin and V. Awasthi, 1996, Impact of Corporate Insider, Blockholder, and Institutional Equity Ownership on Firm Risk Taking, Academy of Management Journal 39: 441-463.

Wright, P., M. Kroll, J. A. Krug and M. Pettus, 2007, Influences of Top Management Team Incentives on Firm Risk Taking, Strategic Management Journal 28: 81-89.

Wynn, J. P., 2008, Legal Liability Coverage and Voluntary Disclosure, The Accounting Review 83: 1639-1669.

Zou, H. and M. B. Adams, 2006, The Corporate Purchase of Property Insurance: Chinese Evidence, Journal of Financial Intermediation 15: 165-196.

Yermack, D., 1996, Higher Market Valuation of Companies with a Small Board of Directors, Journal of Financial Economics 40: 185-212.