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Article
Publication date: 23 December 2022

Jing Huang, Zixi Ling and Ren Lu

The purpose of this paper is to investigate the relations between the directors' and officers' (D&O) insurance and digital transformation of Chinese-listed companies to provide…

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Abstract

Purpose

The purpose of this paper is to investigate the relations between the directors' and officers' (D&O) insurance and digital transformation of Chinese-listed companies to provide insights into triggers of digital transformation from the perspective of D&Os' incentive plan.

Design/methodology/approach

Based on a panel dataset of 2,590 listed manufacturing companies in China from 2017 to 2020, and using a textual analysis of annual reports, this paper empirically examines the impact of D&O insurance on digital transformation. The authors investigate the mechanism through a mediating model and apply a series of robustness tests including firm fixed effect model, propensity score matching and changing key measures.

Findings

The research shows that the digital transformation has been negatively influenced by D&O insurance. The long coverage duration of D&O insurance significantly lowers the level of digital transformation. The moral hazard problem caused by D&O insurance has hampered digital transformation through reducing explorative innovation, while there has been no significant change in innovation quantity. Under the coverage of D&O insurance, firms with worse internal governance and state-owned firms are more reluctant to invest in risky transformation than their counterparts.

Originality/value

Based on a textual analysis of annual reports, this paper empirically tests the influential mechanism of D&O insurance coverage on digital transformation. The authors provide insights into non-tech triggers of digital transformation and uncover how incentive plans influences D&Os' behaviors. This paper provides a new angle to the debate on governance-strengthening and governance-weakening role of D&O insurance.

Details

Business Process Management Journal, vol. 29 no. 1
Type: Research Article
ISSN: 1463-7154

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Article
Publication date: 1 April 2000

Heiko de B. Wijnholds

Considers the effects on the mass media of China’s transition to a more open economy and the strategies which advertisers might use to overcome the problems it presents. Describes…

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Abstract

Considers the effects on the mass media of China’s transition to a more open economy and the strategies which advertisers might use to overcome the problems it presents. Describes the media available (including the unofficial “black route”, the official but restricted private sector “white route”, and the state “red route”) and lists the challenges which advertisers face in using them. Suggests some strategies and practices which can help to overcome them and some hypotheses on future media use. Calls for further research in this area.

Details

Managerial Finance, vol. 26 no. 4
Type: Research Article
ISSN: 0307-4358

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