Lim, Chu Yeong Wang, Jiwei and Zeng, Cheng (Colin) 2018. China's “Mercantilist” Government Subsidies, the Cost of Debt and Firm Performance. Journal of Banking & Finance, Vol. 86, p. 37.
Adams, Mike Hoejmose, Stefan and Kastrinaki, Zafeira 2017. Corporate Philanthropy and Risk Management: An Investigation of Reinsurance and Charitable Giving in Insurance Firms. Business Ethics Quarterly, Vol. 27, Issue. 01, p. 1.
Zhang, Dongyang and Liu, Deqiang 2017. Determinants of the capital structure of Chinese non-listed enterprises: Is TFP efficient?. Economic Systems, Vol. 41, Issue. 2, p. 179.
Sheikh, Sana Syed, Ali Murad and Ali Shah, Syed Sikander 2017. Corporate Reinsurance Utilisation and Capital Structure: Evidence from Pakistan Insurance Industry. The Geneva Papers on Risk and Insurance - Issues and Practice,
Lee, Edward Walker, Martin and Zeng, Cheng (Colin) 2017. Do Chinese state subsidies affect voluntary corporate social responsibility disclosure?. Journal of Accounting and Public Policy, Vol. 36, Issue. 3, p. 179.
Zhang, Dongyang 2017. Is working capital management value-enhancing through alleviating financial constraints? Evidence from Chinese non-listed firms. Journal of Chinese Economic and Business Studies, Vol. 15, Issue. 4, p. 373.
Hwang, Joon Ho and Kim, Byungmo 2016. DIRECTORS’ ANDOFFICERS’LIABILITYINSURANCE ANDFIRMVALUE. Journal of Risk and Insurance,
Lee, Chien-Chiang Lin, Chun-Wei and Zeng, Jhih-Hong 2016. Financial liberalization, insurance market, and the likelihood of financial crises. Journal of International Money and Finance, Vol. 62, p. 25.
Chen, Zhihong Li, Oliver Zhen and Zou, Hong 2016. Directors׳ and officers׳ liability insurance and the cost of equity. Journal of Accounting and Economics, Vol. 61, Issue. 1, p. 100.
Pan, Xiaofei and Tian, Gary Gang 2016. Family control and loan collateral: Evidence from China. Journal of Banking & Finance, Vol. 67, p. 53.
Mankaï, Selim and Belgacem, Aymen 2016. Interactions Between Risk Taking, Capital, and Reinsurance for Property-Liability Insurance Firms. Journal of Risk and Insurance, Vol. 83, Issue. 4, p. 1007.
Chui, Andy C.W. Kwok, Chuck C.Y. and (Stephen) Zhou, Gaoguang 2016. National culture and the cost of debt. Journal of Banking & Finance, Vol. 69, p. 1.
Chi, Wuchun Huang, Huichi and Xie, Hong 2015. A quantile regression analysis on corporate governance and the cost of bank loans: a research note. Review of Accounting and Finance, Vol. 14, Issue. 1, p. 2.
Egger, Peter Radulescu, Doina and Rees, Ray 2015. Heterogeneous Beliefs and the Demand for D&O Insurance by Listed Companies. Journal of Risk and Insurance, Vol. 82, Issue. 4, p. 823.
Upreti, Vineet and Adams, Mike 2015. The strategic role of reinsurance in the United Kingdom’s (UK) non-life insurance market. Journal of Banking & Finance, Vol. 61, p. 206.
Chen, Deqiu Li, Sifei Xiao, Jason Zezhong and Zou, Hong 2014. The effect of government quality on corporate cash holdings. Journal of Corporate Finance, Vol. 27, p. 384.
Devos, Erik and Rahman, Shofiqur 2014. Location and lease intensity. Journal of Corporate Finance, Vol. 29, p. 20.
Lin, Chen Officer, Micah S. Wang, Rui and Zou, Hong 2013. Directors' and officers' liability insurance and loan spreads. Journal of Financial Economics, Vol. 110, Issue. 1, p. 37.
Jia, Joy Adams, Mike and Buckle, Mike 2012. Insurance and ownership structure in India’s corporate sector. Asia Pacific Journal of Management, Vol. 29, Issue. 1, p. 129.
Jiang, Wei Adams, Mike and Jia-Upreti, Joy 2012. Does managerial entrenchment motivate the insurance decision?. International Review of Financial Analysis, Vol. 24, p. 117.
Using a unique insurance dataset for a sample of Chinese publicly listed companies for the period 1997 through 2003, this study tests the simultaneous linkages between debt capacity, cost of debt, and corporate property insurance. Our results suggest that, on the one hand, a higher cost of debt appears to motivate the use of more property insurance, but high leverage alone does not lead to the purchase of more property insurance. The latter finding might reflect the unique institutional setting of China, for example, where there is a low chanceof legally enforced company liquidation. Also, there is evidence that leverage can interact with tangible assets intensity and exert a positive conjoint effect on the corporate purchase ofproperty insurance. On the other hand, we find evidence that supports that property insurance helps expand insuring firms' debt capacity and helps lower their borrowing costs. However, themoderate evidence on the cost reduction effect suggests that lowering the borrowing cost is likely to be a concern secondary to facilitating corporate borrowing and thereby expanding debt capacity in corporate property insurance decisions in China. Overall, we conclude that debt capacity, cost of debt, and corporate insurance appear to be simultaneously related.
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