The purpose of this paper is to address the opposing views of the relationship between directors’ and officers’ liability insurance (D&O insurance) and stock price crash risk in a…
Abstract
Purpose
The purpose of this paper is to address the opposing views of the relationship between directors’ and officers’ liability insurance (D&O insurance) and stock price crash risk in a major Asian emerging stock market.
Design/methodology/approach
This paper finds an endogenous relationship between D&O insurance and stock price crash risk. Hence, the two-stage least squares regression analysis is used to address the endogeneity issue when the relationship is examined. Moreover, this paper further controls the quality of other corporate governance mechanisms to investigate whether D&O insurance still has an effect on stock price crash risk.
Findings
The effect of D&O insurance coverage is significantly negatively related to firm-specific stock price crash risk in Taiwan. More importantly, even when the quality of other corporate governance mechanisms is controlled, the negative relationship between D&O insurance coverage and firm-specific stock price crash risk remains significant. The evidence supports that D&O insurance serves as an effective external monitoring mechanism, strengthens corporate governance, and thus reduces stock price crash risk.
Originality/value
Emerging Asian markets suffer a dearth of research on the relationship of D&O insurance coverage and the firm-specific stock price crash risk. Investigating the relationship in Taiwan, the present study fills the research void. The findings show that D&O insurance plays an important role in reducing stock price crash risk of Taiwanese firms even when other corporate governance mechanisms are in place.
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Ghoulemallah Boukhalfa, Sebti Belkacem, Abdesselem Chikhi and Said Benaggoune
This paper presents the particle swarm optimization (PSO) algorithm in conjuction with the fuzzy logic method in order to achieve an optimized tuning of a proportional integral…
Abstract
This paper presents the particle swarm optimization (PSO) algorithm in conjuction with the fuzzy logic method in order to achieve an optimized tuning of a proportional integral derivative controller (PID) in the DTC control loops of dual star induction motor (DSIM). The fuzzy controller is insensitive to parametric variations, however, with the PSO-based optimization approach we obtain a judicious choice of the gains to make the system more robust. According to Matlab simulation, the results demonstrate that the hybrid DTC of DSIM improves the speed loop response, ensures the system stability, reduces the steady state error and enhances the rising time. Moreover, with this controller, the disturbances do not affect the motor performances.
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Seock-Jin Hong and François Domergue
The Korean airline industry continues to change in 20-year cycles structurally. The major changes are in their market through deregulation and liberalization resulting in adding…
Abstract
The Korean airline industry continues to change in 20-year cycles structurally. The major changes are in their market through deregulation and liberalization resulting in adding more carriers, especially low-cost carriers (LCCs) from 2006. The authors categorize three types of LCCs in Korea: (1) independent LCCs, (2) LCCs subsidized by existing airlines as airlines-within-airlines (AwAs), and (3) LCCs supported by conglomerates and local governments. Independent LCCs have suffered financially during the research period from 2009 to 2013, especially from the impaired capital, even though these LCCs are growing rapidly and expanding their markets in domestic and international routes. AwAs’ efficiency is higher than that of independent LCCs, the roles in the market are limited because of cannibalization by their mother company.