| Summary: | 碩士 === 淡江大學 === 產業經濟學系 === 90 === This paper provides empirical evidence about the impacts of the two types of managerial ownership in Taiwan on firm performance and the differences between group affiliates and unaffiliated firms. We constitute a balanced panel containing information about 229 firms listed on Taiwan Stock Exchange in 1994 for the 6-year period 1995-2000. The purpose of this study is to investigate the substitutability of the two types of managerial ownership in Taiwan and the relationship between managerial ownership and firm performance and the differences between group firms and non-group firms.The empirical results show that there exist substitutability between shareholdings of individual and institutional managers and the substitutability in group and non-group firms is quite different. The substitution of institutional ownership for individual ownership in group firms is more substantial than in non-group firms. Institutional ownership creates a mechanism for group members to tie together, and hence should be more important and less substitutable in group affiliates. However, for group affiliates, because institutional ownership may cause some problems to reduce firm performance, the substitution of individual ownership for institutional ownership is more substantial than that of institutional for individual ownership. Besides, pyramids and cross-holdings are commonly used mechanisms within business groups for families to concentrate control. Both individual and institutional managerial ownership have more significant impacts on performance in unaffiliated firms because the transparency problem and reciprocal ownership caused by pyramids and cross-ownership in business groups make the performance of member firms less sensitive to the changes of managerial ownership. Our empirical results also suggest that the institutional managerial ownership in Taiwan has a negative impact on performance and conform to entrenchment hypothesis. To unaffiliated firms, institutional managers are representatives arranged by institutions, they do not really hold shareholding of the firm and they may tend to consume excess perquisites and engage in opportunistic behavior at shareholders’ expenses. For group firms, institutional managers may usually be family members, when there are interests conflicts between their families and corporations, they may consider their family interests fist and cause damage to minority shareholders. Finally, the individual managerial ownership in Taiwan does enhance firm performance. Individual ownership in Taiwan listed companies serve as a credible guarantee of bearing the cost of not maximizing the value of shares and conform to convergence -of-interest-hypothesis.
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