arbiter
JournalsAccount

Governing innovation: The role of D&O insurance in curbing R&D opportunism

Chujun Zhang et al.

International Review of Economics & Finance2026https://doi.org/10.1016/j.iref.2026.105136article
AJG 2ABDC A
Weight
0.50

Abstract

This study investigates the impact of Directors and Officers (D&O) liability insurance on Research and Development (R&D) manipulation among Chinese listed companies. Using a sample of 27,569 firm-year observations from 2010 to 2022, we find that D&O insurance significantly reduces R&D manipulation, especially in non-state-owned firms, under strong external supervision, and during the growth and maturity stages. Further analysis reveals a talent attraction mechanism: D&O coverage increases the proportion of executives with overseas experience, which helps curb opportunistic behavior. We also show that D&O insurance weakens the negative impact of R&D manipulation on future innovation. These findings highlight the governance and strategic value of D&O insurance. • D&O insurance significantly reduces R&D manipulation in Chinese listed companies • Governance effects are stronger in non-SOEs and under strong external supervision • D&O coverage attracts overseas-experienced executives who curb opportunistic behavior • Insurance mitigates the negative impact of R&D manipulation on innovation performance • Results support governance enhancement over the moral hazard perspective of D&O insurance

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1016/j.iref.2026.105136

Or copy a formatted citation

@article{chujun2026,
  title        = {{Governing innovation: The role of D&O insurance in curbing R&D opportunism}},
  author       = {Chujun Zhang et al.},
  journal      = {International Review of Economics & Finance},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.iref.2026.105136},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Governing innovation: The role of D&O insurance in curbing R&D opportunism

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.