Using the exogenous adoption of state-level constituency statute as a natural experiment for corporate stakeholderism and the data of U.S. manufacturing firms for the period of 1980-2018, we find that firms increase their inventory holdings after the adoption of the statute. This effect is more...

Extant literature demonstrates that participating policies mitigate shareholder-policyholder incentive conflicts in stock insurance firms. However, extending the argument in Mayers and Smith (1994), we formally show that participating policies also exacerbate the shareholder-manager incentive...

Insurance regulators, policyholders, and investors are interested in the ability of insurers to fulfill their financial obligations. Economic and finance theory suggests that, all else equal, more efficient firms should be financially stronger firms. Efficiency scores represent a quantitative...

A simplified financial-economic theory of the insurance firm under uncertainty is used to determine whether ambiguity about the expected claim frequency and/or the claim severity distribution for potential insured losses has any impact on the insurance rate. The model shows that the risk charge...

Previous research on insurer cost of equity (COE) focuses on single-period asset pricing models. In reality, however, investment and consumption decisions are made over multiple periods, exposing firms to time-varying risks related to economic cycles and market volatility. We extend the...

Life insurers hold the majority of private debt. Lenders in the private debt market must have the ability to evaluate the credit quality of borrowers and to perform ongoing risk monitoring. The relatively low liquidity of private debt and renegotiation potential enhances the value of a long-term...