Title: D&O Liability Insurance and the Direction of Corporate

Innovation: Evidence from AI

Speaker: Peter G. Szilagyi, Professor of Finance at EDHEC Business School. He is currently Editor of Elsevier's Journal of International Financial Markets, Institutions & Money. His research has been published in leading academic journals, including Journal of International Business Studies, Journal of Business Ethics, Journal of Corporate Finance.

Abstract: We examine whether directors' and officers' (D&O) liability insurance redirects corporate innovation toward artificial intelligence (AI), a high-risk general purpose technology. Based on behavioral agency theory, we argue that managers' personal downside risk discourages risky innovation, and D&O insurance mitigates this friction. Using Chinese listed firms from 2003–2022, we find that D&O insurance does not increase overall patenting, but significantly increases AI-related patents and their share of total patents. Results are robust to alternative AI measures and causal tests, indicating strategic redirection rather than greater innovation intensity. Effects are stronger in firms with higher uncertainty, private ownership, and politically unconnected managers. D&O insurance also improves Tobin's Q, productivity, and investor attention.

Date & time: 27 March 2026, 17:00 - 18:00

Venue: B321, Zhixin Building, Central Campus, Shandong UniversityZoom Meeting (Online): 857 0407 9447, Password: 796496