Findings from Wuhan Technology and Business University Broaden Understanding of Business and Finance (Can Compulsory Liability Insurance Reduce Agency Costs? Evidence From China): Business and Finance

2023 JUN 26 (NewsRx) -- By a News Reporter-Staff News Editor at Daily China News -- Investigators discuss new findings in Business and Finance. According to news reporting out of Wuhan, People’s Republic of China, by NewsRx editors, research stated, “This paper discusses the impact mechanism of compulsory liability insurance on agency costs. Studying the companies listed in China’s food manufacturing industries in 2011-2018, we find that compulsory liability insurance significantly reduces the two types of agency costs, namely, alleviating the principal-agent problem and the principal-principal problem.”

Our news journalists obtained a quote from the research from Wuhan Technology and Business University, “Robustness tests confirm this finding. The reduction of information asymmetry and the improvement of internal control quality are the mechanisms leading to this result. Compulsory food safety liability in-surance plays a significant role in reducing agency costs when company ownership is concen-trated or when media coverage is high.”

According to the news editors, the research concluded: “This paper provides empirical evidence for joint regulation by the public and private sectors, also provides theoretical reference for further optimizing food safety governance mode.”

This research has been peer-reviewed.

For more information on this research see: Can Compulsory Liability Insurance Reduce Agency Costs? Evidence From China. Research in International Business and Finance, 2023;65:101966. Research in International Business and Finance can be contacted at: Elsevier, Radarweg 29, 1043 Nx Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Research in International Business and Finance - http://www.journals.elsevier.com/research-in-international-business-and-finance/)

Our news journalists report that additional information may be obtained by contacting Guangqiang Liu, Wuhan Technology and Business University, School of Management, Wuhan, People’s Republic of China. Additional authors for this research include Di Wang and Linlin Xie.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.ribaf.2023.101966. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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