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Article: Chief executive officer incentives, monitoring, and corporate risk management: Evidence from insurance use

TitleChief executive officer incentives, monitoring, and corporate risk management: Evidence from insurance use
Authors
Issue Date2011
Citation
Journal Of Risk And Insurance, 2011, v. 78 n. 3, p. 551-582 How to Cite?
AbstractCorporate governance and risk management issues have received prominent publicity in recent years following several major company failures such as Bear Stearns and Lehman Brothers. While prior studies have examined this issue within the context of derivatives' trading, little is known regarding the linkage between corporate governance and alternative corporate risk management activities such as insurance. Using a detailed firm survey conducted by the World Bank (2004), we examine the impacts of various governance monitoring mechanisms and chief executive officer (CEO) characteristics on the corporate insurance decision. Overall, our results suggest that both monitoring mechanisms and managerial incentives induce the corporate purchase of property insurance. However, the purchase of property insurance for managerial self-interest is only prevalent in firms subject to lax monitoring, and the determinants of insurance purchases are more in line with the prediction of the economic theory in firms with strong monitoring. In addition, our study contributes a number of new insights into the determinants of corporate purchase of property insurance. © The Journal of Risk and Insurance, 2011.
Persistent Identifierhttp://hdl.handle.net/10722/188466
ISSN
2015 Impact Factor: 1.535
2015 SCImago Journal Rankings: 1.489
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorAdams, Men_US
dc.contributor.authorLin, Cen_US
dc.contributor.authorZou, Hen_US
dc.date.accessioned2013-09-03T04:07:44Z-
dc.date.available2013-09-03T04:07:44Z-
dc.date.issued2011en_US
dc.identifier.citationJournal Of Risk And Insurance, 2011, v. 78 n. 3, p. 551-582en_US
dc.identifier.issn0022-4367en_US
dc.identifier.urihttp://hdl.handle.net/10722/188466-
dc.description.abstractCorporate governance and risk management issues have received prominent publicity in recent years following several major company failures such as Bear Stearns and Lehman Brothers. While prior studies have examined this issue within the context of derivatives' trading, little is known regarding the linkage between corporate governance and alternative corporate risk management activities such as insurance. Using a detailed firm survey conducted by the World Bank (2004), we examine the impacts of various governance monitoring mechanisms and chief executive officer (CEO) characteristics on the corporate insurance decision. Overall, our results suggest that both monitoring mechanisms and managerial incentives induce the corporate purchase of property insurance. However, the purchase of property insurance for managerial self-interest is only prevalent in firms subject to lax monitoring, and the determinants of insurance purchases are more in line with the prediction of the economic theory in firms with strong monitoring. In addition, our study contributes a number of new insights into the determinants of corporate purchase of property insurance. © The Journal of Risk and Insurance, 2011.en_US
dc.languageengen_US
dc.relation.ispartofJournal of Risk and Insuranceen_US
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.rightsThis is the pre-peer reviewed version of the following article: [Journal Of Risk And Insurance, 2011, v. 78 n. 3, p. 551-582], which has been published in final form at [http://dx.doi.org/10.1111/j.1539-6975.2011.01409.x]. Authors are not required to remove preprints posted prior to acceptance of the submitted version.-
dc.titleChief executive officer incentives, monitoring, and corporate risk management: Evidence from insurance useen_US
dc.typeArticleen_US
dc.identifier.emailZou, H: hongzou@hku.hken_US
dc.identifier.authorityZou, H=rp01800en_US
dc.description.naturepreprinten_US
dc.identifier.doi10.1111/j.1539-6975.2011.01409.xen_US
dc.identifier.scopuseid_2-s2.0-80052079189en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-80052079189&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume78en_US
dc.identifier.issue3en_US
dc.identifier.spage551en_US
dc.identifier.epage582en_US
dc.identifier.isiWOS:000294667600003-
dc.publisher.placeUnited Statesen_US
dc.identifier.scopusauthoridAdams, M=7403905632en_US
dc.identifier.scopusauthoridLin, C=48662441800en_US
dc.identifier.scopusauthoridZou, H=48663306300en_US

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