New evidence of moral hazard: Environmental liability insurance and firms' environmental performance
利用中国环境责任保险政策的逐步实施作为准自然实验，研究发现该政策显著降低了企业治理水污染的努力，表明存在道德风险问题，且严格监管和强环境意识可缓解此效应。
Abstract This paper provides novel evidence of the moral hazard problem in environmental insurance by investigating the effect of environmental liability insurance (ELI) on firms' environmental performance. Using the staggered adoption of ELI policies in China as a quasi‐natural experiment, we employ a difference‐in‐differences setup based on a comprehensive firm‐level data set. We find that the adoption of ELI policies significantly reduces firms' efforts in treating water pollution. The negative estimate indicates a moral hazard problem and is the opposite of the positive estimates found mainly in studies that focus on US firms. We further find that the negative effect is lessened for firms in strictly supervised regions and for firms with strong environmental awareness. This paper is one of the first to evaluate environmental insurance in developing economies and provides novel evidence on moral hazard in environmental liability insurance markets.