Nonlinear effects of board characteristics on China’s hotel firm performance

Chunmei Liang, Ming-Hsiang Chen, Di Zhu, Hung Wan Kot and Zhandong Yang
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Chunmei Liang: 12688Dongbei University of Finance and Economics, China
Ming-Hsiang Chen: Washington State University, USA
Di Zhu: 12688Dongbei University of Finance and Economics, China
Hung Wan Kot: 59193University of Macau, China
Zhandong Yang: 47838Beijing Sport University, China

Tourism Economics, 2022, vol. 28, issue 8, 1998-2020

Abstract: This study uses dynamic panel regression tests based on the estimation of the system generalized method of moments to examine the effects of board size (BS), board age (BA), and board education (BE) on China’s hotel firm performance (FP). Test results reveal that the effects of BS and BA on hotel FP are nonlinear, but BE has no effect. Specifically, BS has a cubic effect on hotel growth opportunities in terms of Tobin’s Q with turning points equal to 12 and 18, supporting both agency theory and resource dependence theory. Moreover, the impact of BA on hotel growth opportunities is quadratic (inverted U-shaped) with an optimal point of BA at 51, supporting both similarity–attraction theory and human capital theory. Empirical findings suggest that director-owned resources and experience are essential factors in a hotel’s success, providing strategic guidance for the Chinese hotel industry and making a pioneering addition to the hospitality finance literature.

Keywords: agency theory; board characteristics; hotel performance; human capital theory; resource dependence theory; similarity–attraction theory (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:28:y:2022:i:8:p:1998-2020

DOI: 10.1177/13548166211025335

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