This study analyzes the relationship between a firm's ownership structure and its performance. Directorial and managerial ownership are two types of ownership. The corporate life cycle stages analyzed in this paper include the growth stage, the maturity stage, and the life cycle as a whole. The data was taken from a 1994-2004 panel of 488 manufacturing firms listed on the Taiwan stock exchange. In order to correct endogeneity issues, a simultaneous model is used to analyze the relationship. As a result, in the case of both the growth and maturity stages, directorial ownership is shown to be influenced by corporate performance; however, corporate performance is not found to influence managerial ownership. On the one hand, an inverted U-shaped relationship is deciphered between directorial ownership and performance, which suggests optimal ownership shares for directors; on the other hand, a U-shaped relationship between managerial ownership and performance is found. These relationships refer to the alignment and entrenchment effect, respectively.