Document Type

Journal article

Source Publication

Journal of Corporate Finance

Publication Date

4-1-2012

Volume

18

Issue

2

First Page

311

Last Page

330

Publisher

Elsevier BV

Keywords

Property rights protection, Banking, Risk Management

Abstract

Recent studies in the law and finance literature have shown that property rights protection is central to corporate financing and investment decisions and economic growth at large. We extend this literature by examining the effect of property rights security on corporate risk management decisions - an important element of a firm’s business strategy. Using a unique dataset covering over 55,000 Chinese firms and employing both institution- and firm-level measures of property rights security, we find that secure property rights lead to higher corporate demand for property insurance, suggesting that property rights security is an important determinant of corporate risk management decisions. The effect of property rights protection on insurance consumption is also validated by a cross-country analysis that uses data from 93 countries over the period 1995-2008. Our study represents an initial attempt towards understanding the importance of property rights protection to corporate risk management decisions.

DOI

10.1016/j.jcorpfin.2011.12.006

Print ISSN

09291199

E-ISSN

18726313

Publisher Statement

Copyright © 2011 Elsevier B.V.

Access to external full text or publisher's version may require subscription.

Full-text Version

Accepted Author Manuscript

Language

English

Recommended Citation

Lin, C., & Zou, H. (2012). Does property rights protection affect corporate risk management strategy? Intra- and cross-country evidence. Journal of Corporate Finance, 18(2), 311-330. doi: 10.1016/j.jcorpfin.2011.12.006

Share

COinS