This article examines the determinants of life insurance consumption in OECD countries. Consistent with previous results, we find a significant positive income elasticity of life insurance demand. Demand also increases with the number of dependents and level of education, and decreases with life expectancy and social security expenditure. The country's level of financial development and its insurance market's degree of competition appear to stimulate life insurance sales, whereas high inflation and real interest rates tend to decrease consumption. Overall, life insurance demand is better explained when the product market and socioeconomic factors are jointly considered. In addition, the use of GMM estimates helps reconcile our findings with previous puzzling results based on inconsistent OLS estimates given heteroscedasticity problems in the data. Copyright The Journal of Risk and Insurance, 2007.

Manuscript Type: EmpiricalResearch Question/Issue: Due to a greater difficulty to achieve compromise, large decision making groups tend to adopt less extreme decisions. This implies that larger boards are associated with lower corporate risk taking. We test whether a similar effect applies to the case of Japanese firms. The result is expected to be weaker since Japanese boards form relatively homogenous groups. We further argue that growth opportunities moderate the relation between board size and risk taking. Research Findings/Results:Our results indicate that firms with larger boards exhibit lower performance volatility as well as lower bankruptcy risk. However, the effect is not as significant as in the US. The low cross-sectional variation in risk taking among Japanese firms is found to play a role. In addition, we show that the effect of board size is less significant when firms have plenty of investment opportunities, but much stronger when firms have fewer growth options. Theoretical Implications:Considering that risk taking contributes to firm performance, our results offer a rationale as to why larger boards might be associated with lower performance. However, they also suggest that this effect should be less detrimental to firms with significant investment opportunities. Practical Implications:Firms should adapt their decision processes to their business environment. In particular, they may need to adjust the size of their boards to the characteristics of their investment opportunity sets. Firms with fewer growth options would gain most by operating with smaller boards. By restricting their ability to take risks, firms could undermine their growth potential and performance.

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We analyze the influence of gender diversity in top management on the environmental performance of French firms. Consistent with gender socialization theory, which posits that women are raised from childhood to be more nurturing and compassionate for others, we find that firms with more women in top management exhibit higher environmental performance. This result extends those already reported in the literature regarding the effect of gender diversity at board level. We also show that women in top management are associated with several key indicators such as development of eco-friendly products and commitment to resource reduction. Furthermore, we find that the influence of women is weaker in firms with a lower environmental performance and in firms with high growth opportunities since these firms are likely to prioritize their own development. This suggest, in line with social role theory, that women also adapt into the role that organizations expect from them.

PurposeThe purpose of this paper is to test two agency‐based hypotheses regarding the effect of ownership concentration on dividend policy using a large sample of Japanese firms.Design/methodology/approachLevel regressions associating payout rates to ownership concentration are run. Different measures of payout are used to ensure the robustness of our findings. Endogeneity of ownership is taken into account. The choice of instruments is carefuly motivated and their statistical power and exogeneity are checked. How ownership concentration affects the propensity to increase dividends following changes in variables correlated with free cash flows is also examined.FindingsThe results are consistent with rent extraction by large shareholders. Ownership concentration is associated with significantly lower dividends in proportion to earnings as well as relative to book equity. An endogenous relation between ownership concentration and dividend payout is established, but the results are not statistically different. Firms with concentrated ownership are also less likely to increase dividends when earnings increase or when debt decreases.Practical implicationsLarge shareholders do not appear to use dividend policy to remove excess cash and impose greater financial discipline on managers. Instead, the results underline the conflicts of interest between majority and minority shareholders.Originality/valueThe endogeneity of ownership is controlled for using firm age and the industry's average ownership concentration as instruments. The effect of ownership concentration on dividend changes following changes in proxies for free cash flows is also analyzed.

We investigate the role of multiple large shareholders (MLS) in corporate risk‐taking. Using a sample of publicly listed French family firms over the period 2003−2012, we show that the presence, number and voting power of MLS are associated with higher risk‐taking. Our results suggest that MLS help restrain the propensity of family owners to undertake low‐risk investments. This effect is much stronger in firms that are more susceptible to agency conflicts. The results highlight the important governance role played by MLS in family firms and may explain why MLS are associated with higher firm performance.

Purpose – The purpose of this paper is to investigate the link between corporate social responsibility (CSR) and risk for a sample of US firms rated by KLD. Design/methodology/approach – The authors’ approach involves three distinctive features. First, the authors use individual indicators of CSR to highlight which CSR dimension matters most for a firm’s risk. Second, the authors distinguish CSR strengths and concerns to reveal potentially nonlinear relationships. Third, the authors use a measure of risk that takes into account the predictable changes in a firm’s performance and that does not collapse the panel data into a single cross-section. This allows the CSR–risk relationship to be estimated by the variation within each firm and the variation across firms. Findings – Consistent with existing results, the authors find that CSR concerns relating to diversity, employee relations and corporate governance increase the risk to shareholders. More interestingly, the authors show that CSR strengths relating to diversity and employee relations are also associated with higher risk. The positive influence of both CSR strengths and concerns on a firm’s risk is confirmed using aggregate CSR indicators. Research limitations/implications – The results confirm that CSR strengths and concerns represent distinct constructs that should not be aggregated into a single measure. The effect of poor CSR on firm risk is more significant than what would appear to be the case using an aggregate index. Practical implications – Although lack of CSR engagement may not affect (and may even benefit) a firm’s current performance, it may seriously damage its performance in the future. Firms should be aware of this risk. Originality/value – The positive relationship found between CSR and firm risk underscores the inherent conflict between the interests of employees and those of shareholders. By committing to a more favorable treatment of their employees, firms incur a fixed cost that inevitably transfers more risk to their shareholders.