Abstract

A series of corporate embezzlement cases in Taiwan prompted the enactment of regulations by the government to enforce the corporate governance (CG) mechanism in listed companies. Prior research has given limited attention to investigating the link between CG and brand equity (BE) in the tourism sector. This study aims to use the resource-based theory and the convergence of interest hypothesis to explore the moderating role of CG in the relationship between BE and corporate profitability (CP). This investigation takes into account ten control variables encompassing company-specific factors and macroeconomic indicators. Utilizing financial data from the Taiwan Economics Journal Database (TEJ), the study covers a 16-year span (2000–2015) and examines 196 records from 32 publicly listed tourism companies. The analysis employs a fixed-effect panel regression approach, utilizing four distinct models with varying dependent variables. The results reveal a positive and significant impact of BE on CP within the context of Taiwanese-listed tourism firms. Importantly, CG is found to moderate the relationship between BE and CP. These findings offer actionable insights for management to enhance profitability by strategically improving both BE and CG practices within the tourism industry. The managerial implications are discussed in depth.

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