| Summary: | 碩士 === 國立高雄第一科技大學 === 財務管理系碩士班 === 106 === We use general method of moments to investigate the impact of directors' and officers' liability insurance (D&O insurance) as well as D&O insurance coverage on stock price crash risk. We find that D&O insurance is negatively associated with stock price crash risk in Taiwan, indicating D&O insurance can improve corporate governance through reducing the risk of stock price crash which suggesting positive influence of monitoring effect function. However, there is no clear significant consistent correlation between D&O insurance coverage and crash risk found in our study. When down-to up volatility being taken as a proxy variable of crash risk, demonstrating significant negatively associated with crash risk but no significant association found with negative conditional skewness as a proxy variable. Overall, there is no sufficient evidence in our study to show that higher coverage could induce moral hazard then deteriorates corporate governance in Taiwan stock market.
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