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臺大管理論叢
第
27
卷第
2S
期
259
Turnover
i,t
(Turnover) is an indicator variable: 1 = if CEO changes from year
t
–1 to
t
, 0 =
otherwise (Kang and Shivdasani, 1995; He and Sommer, 2011 and He et al., 2011).
RoutineCEO
i,t
(Routine CEO turnover) is an indicator variable: 1 = if the departing CEO
remains on the board of directors in year
t
, 0 = otherwise.
Non–RoutineCEO
i,t
(Non-routine
CEO turnover) is an indicator variable: 1 = if the departing CEO does not remain on the
board of directors in year
t
, 0 = otherwise.
ForcedCEO
i,t
(Forced CEO turnover) is an
indicator variable: 1 = if the departing CEO does not leave for reasons for health, death, or to
accept another position; or if the departing CEO is under the age of 60 and thus less likely to
be retiring in year
t
(e.g., Borokhovich et al., 1996; Campbell et al., 2011; Huson et al., 2001;
Huson et al., 2004), 0 = otherwise.
VoluntaryCEO
i,t
(Voluntary CEO turnover) is an indicator
variable: 1 = if the departing CEO leaves for reasons of retirement, health, death, or to accept
another position in year
t
, 0 = otherwise. Routine and non-routine (forced and voluntary)
CEO rates are defined as the ratio of CEO turnover event and number of observations. This
paper investigates the reinsurance policy after CEO turnover event, thus CEO turnover in the
previous year (e.g.,
Turnover
i,t
–1
) will be discussed.
3.3.4 Organizational Structure and Corporate Governance Variables
Mutual
i,t
(Mutual), the organizational structure variable, which is a binary variable: 1 =
mutual organizational structure, 0 = otherwise.
Duality
i,t
(CEO/chairperson of board duality)
is a binary variable: 1 if the CEO and chairperson of the board are the same person and 0
otherwise;
Boardsize
i,t
(Board Size) presents the total number of directors on the board
(Cheng, 2008; Pathan, 2009; He and Sommer, 2011);
Independent_directors
i,t
(Independent
Directors) is the percentage of independent directors on the board. Finally,
Big4Auditors
i,t
(Big 4 Auditors) is a binary variable: 1 if the auditor is one of the four largest accounting
companies in the U.S. (PricewaterhouseCoopers LLP, Ernst & Young, Deloitte, and KPMG),
and 0 otherwise.
Previous studies have documented a series of factors affecting reinsurance demand such
as firm size, line of business concentration, geographic concentration, risk, two year loss
development, tax effects, and ROA (Mayers and Smith, 1990; Garven and Lamm-Tennant,
2003; Cole and McCullough, 2006; Cole et al., 2010; Garven et al., 2014; Cummins et al.,
2008; Wang et al., 2008; Shiu, 2011; Ho, 2016). Our regressions of reinsurance demand
include controls for all of them.
3.3.5 Control Variables
Control variables include firm size in terms of net admitted assets, lines of business
Herfindahl index, geographic Herfindahl index, leverage, risk, two year loss development,