Uncertainty Perception and the Company's Insurance Decision

We examine the impact of Chinese firms' perception of economic policy uncertainty on their decision to purchase D&O coverage, using textual data from 36, 849 annual reports of publicly listed companies. Our results demonstrate that increased perceptions of economic policy uncertainty positively affect these firms' choice to purchase D&O insurance. Our findings remain robust when controlling for lagged dependent variables. Additional analysis shows that cognitive variables have a stronger influence on SMEs and industrial enterprises