Author(s)

Lingxuan Bu, Kunyang Xie, Yi Zhang

Corresponding Author

Lingxuan Bu

ABSTRACT

The financial fraud incident of Luckin Coffee has caused more and more attention to directors’ and officers’ liability insurance in China. This study investigates how does directors’ and officers’ liability insurance (D&O insurance) impact corporate social responsibility. With the data of listed firms in the China stock market from 2010 to 2017, it can be found that companies purchasing D&O insurance performed better on corporate social responsibility than those without D&O insurance, which plays an important role in the long-term development of the company. Moreover, corporate social responsibility information is conducive to the impact of D&O insurance in reducing future stock price crash risk.

KEYWORDS

Directors’ and officers’ liability insurance, corporate social responsibility, corporate social responsibility information, Stock price crash risk