Page 209 - 臺大管理論叢第32卷第2期

NTU Management Review Vol. 32 No. 2 Aug. 2022

4. Research Limitations/Implications

In this research, we measure the degree of DOLI coverage on firm level. In other
words, this research lacks of information on insurance amount for individual insured. As

the information on board member level of DOLI coverage is available, conducting analysis
on how DOLI coverage of single board member or CEO affects the firm’s financial
versus nonfinancial consequences becomes feasible. Moreover, to some extent, while
the insurance premiums of firms’ DOLI could be regarded as the insurers’ assessment of

firms’ probability of accidents in DOLI policy, the disclosure of premiums of each firm
helps researchers evaluate the impact of DOLI coverage on financial versus nonfinancial
consequences, including the CSR performance.
Additionally, the policy implication from our empirical evidence is that government

security authorities may have confidence of continuing in promoting the regulations of
DOLI. On the one hand, DOLI helps prevent the loss of top-tier management of firms
due to potential litigation, and thus DOLI also helps strengthen corporate governance. On
the other hand, the process of purchasing and underwriting DOLI policy also helps a firm

make decisions that are more associated with stakeholders’ interests, which brings the
firm to greater sustainability, and also stabilizes financial markets. Finally, for investors,
firms with greater degree of DOLI coverage are with better CSR performance, more
comprehensive management for overall risks, better subsequent financial performance and

market value, thus its long-term investment benefits are more attractive.

5. Originality/Contribution

The contribution of this research is that the results show another merit of DOLI
coverage. While most of the existing research on DOLI explores how DOLI coverage
affects the firm’s financial and non-financial consequences, for examples, firm performance
and firm value (Chen, Wang, Wu, and Wu, 2015; Yi, Chen, and Lin, 2018), cost of capital

(Chen, Li, and Zou, 2016; Yi, Chen, and Zhao, 2013), credit ratings (Liao, Tang, and Li,
2017), earnings quality and restatement of financial reports (Tang, Liao, and Li, 2014;
Tang, Liao, and Li, 2015), audit fees (Chan, Sue, and Liou, 2014), tax avoidance (Li and

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