Page 208 - 臺大管理論叢第32卷第2期

Directors’ and Officers’ Liability Insurance and Corporate Social Responsibility

Rosenbaum and Rubin, 1983, 1985a, 1985b), quadratic regression estimation of nonlinear
effects of DOLI coverage on CSR performance, the impacts of excess DOLI coverage on
CSR performance, the effects of industry-adjusted DOLI coverage on CSR performance.
We also apply quantile regression estimation by Koenker and Bassett (1978) to examine

the spectrum of DOLI effects among various level of CSR performance. Overall, we find
the principal outcome does not change in these abundant additional analyses, and the
positive association between the degree of DOLI and CSR performance is still prevailed.

3. Findings

In terms of the baseline regression result, regardless of which measure of DOLI
coverage and CSR performance is employed, the evidence generally shows that the

degree of DOLI coverage positively affects a firm’s CSR performance, supporting our
hypothesis that firms attaching greater importance to protecting senior personnel against
litigation risk tend to engage more in taking care of stakeholders’ interests. Empirical
results under nonlinear and quantile regression estimation show that while the degree of

DOLI’s coverage in improving a firm’s CSR performance is decreasing, firms attaching
greater importance to CSR tend to have greater magnitude of positive effect of DOLI
coverage on CSR performance. These results indicate that if the firms pay more attention
to corporate sustainability, these firms will also emphasize more on the importance of

overall risk management, thereby strengthening the positive linkage between the litigation
risk reduction and stakeholders’ management engagement. In 2SLS instrumental variable
estimation, no matter which coverage (the lagged DOLI coverage or the industrial
average DOLI coverage) is employed as the instrument, empirical evidence shows a

positive association between DOLI coverage and CSR performance. When we control
the demanding and predetermined factors of the firms’ DOLI coverage and the excess
coverage of DOLI, we still find the positive relationship between DOLI coverage and CSR
performance exists. Finally, this research obtains the evidence that firms with better CSR

performance are beneficial to the enhancement of subsequent financial performance and
firm value.

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