Hedging Affecting Firm Value via Financing and Investment: Evidence from Property Insurance Use
研究中国公司购买财产保险（一种纯对冲资产损失风险的工具）对企业价值的影响，发现保险使用程度与托宾Q值呈倒U型关系，适度保险提升价值，过度保险则有害，且保险通过帮助企业获得新债务融资和促进投资来创造价值。
I provide evidence about the value effects of alternative risk management by examining corporate purchase of property insurance, a commonly used pure hedge of asset‐loss risks. Using an insurance data set from China, I find that there is an inverted U‐shape effect of the extent of property insurance use on firm value measured by several versions of Tobin's Q. Therefore, the use of property insurance, to a certain degree, has a positive effect on firm value; however, over insurance appears detrimental to firm value. Given that the inflection points occur at relatively high levels of the observed insurance spending, insurance use appears beneficial to the majority of my sample firms. The estimated average hedging premium is about 1.5%. I demonstrate that an avenue for insurance to create value in China is that it helps firms secure valuable new debt financing and enhance investment.