IDEAS home Printed from https://ideas.repec.org/a/eee/beexfi/v48y2025ics2214635025000917.html

Under the shield: How directors’ and officers’ liability insurance affects corporate greenwashing

Author

Listed:
  • Tang, Chun
  • Yang, Guangyi
  • Liu, Xiaoxing

Abstract

The dual-edged nature of Directors’ and Officers’ liability insurance (D&O insurance) draws our attention to exploring how it influences corporate greenwashing by shaping executive behavior. Using data from Chinese listed companies, our results demonstrate that D&O insurance significantly induces corporate greenwashing behavior, with this effect notably mitigated when the insurance announcement emphasizes the company’s interests or includes exemption clauses. We identify that heightened executive moral hazard is the key channel through which this effect operates. The background of executives further distorts the effect of D&O insurance: it is prominent among executive teams with dispersed power, lack of academic and political backgrounds. Further research offers regulators insights on curbing the negative impacts of D&O insurance by highlighting the importance of strengthened regulatory warnings and supervision intensity.

Suggested Citation

  • Tang, Chun & Yang, Guangyi & Liu, Xiaoxing, 2025. "Under the shield: How directors’ and officers’ liability insurance affects corporate greenwashing," Journal of Behavioral and Experimental Finance, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:beexfi:v:48:y:2025:i:c:s2214635025000917
    DOI: 10.1016/j.jbef.2025.101110
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2214635025000917
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jbef.2025.101110?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:beexfi:v:48:y:2025:i:c:s2214635025000917. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-behavioral-and-experimental-finance .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.