The impact of insider managerial ownership on corporate performance of Taiwanese tourist hotels.

This study examines the impact of insider managerial ownership on financial performance of publicly traded tourist hotels in Taiwan. Insider managerial shareholding () includes two different classes of owners: managers and directors (i.e., managers' shareholding [] plus directors' shareholding []). The indicators of financial performance under consideration are return on assets (), return on equity (), stock return (), and Tobin's Q. In addition to analyzing total insider managerial ownership (), the study splits into two components ( and ) and examines each of them, separately. Subsequently, panel regression tests examine the effects of , , and on financial performance of Taiwanese tourist hotels. Test results suggest that explains , and , but not . Further, compared to , has a more significant impact on hotel performance. Specifically, an inverted U-shape represents the effects of and on hotel performance (, and ), indicating that both and have a significantly positive impact on hotel performance up to an optimal point (supporting the convergence-of-interests hypothesis). Further, when and are greater than their corresponding optimal points, these two factors can significantly deteriorate hotel performance (supporting the entrenchment hypothesis).