SELECTED PUBLICATIONS

Link to my SSRN webpage / Link to my Google Scholar profile

FAMILY CONTROL, STOCK PRICE LEVELS, AND STOCK SPLIT ACTIVITY

With François Belot, Finance, volume 42, issue 1, May 2021, pages 155-219. Download

We investigate the impact of family control on both the share price level and the decision to split the firm’s stock. Low stock prices are associated with higher volatility and have been shown to attract more speculative trading, which may force managers to excessively focus on short-term earnings. Moreover, a reduction in the stock price level is often associated with a loss of prestige. We hypothesize that family owners, who are typically long-term investors and are especially concerned about corporate reputation, prefer to set higher stock prices to mitigate short-termism, focus on long-term planning, and reinforce the firm’s prestige. Using a comprehensive sample of firms in the Société des Bourses Françaises (SBF) 120 Index from 1998 to 2016, we find a positive correlation between share prices and family control. Our investigations also indicate that family firms are less likely to conduct price reductions through stock splits. These findings suggest that a high stock price is a distinctive feature of family firms and that family owners have a specific norm in mind with respect to prices.

LABOR CONFLICTS IN FRENCH WORKPLACES: DOES (THE TYPE OF) FAMILY CONTROL MATTER?

With François Belot, Journal of Business Ethics, volume 146, issue 3, December 2017, pages 591-617. Download

This paper investigates the influence of family control on the quality of labor relations. Using French workplace-level data, we find that family firms experience less frequent and less intense labor conflicts. Moreover, family involvement tends to offset the negative effect of labor disputes on corporate performance. We examine whether specific family patterns are conducive to better labor relations. We distinguish active from passive family control, eponymous from non-eponymous family businesses, and break down family firms into founder-controlled and descendant-controlled companies. It appears that the benefits of family control are not attributable to a given type of family firm. These findings suggest that peaceful labor relationships are a peculiar attribute that families generally bring to corporations and extend our understanding of the ‘‘family effect’’ on organizational performance.

EMPLOYEE OWNERSHIP, BOARD REPRESENTATION, AND CORPORATE FINANCIAL POLICIES

With Édith Ginglinger and William MegginsonJournal of Corporate Finance, volume 17, issue 4, September 2011, pages 868-887. Download

French law mandates that employees of publicly listed companies can elect two types of directors to represent employees. Privatized companies must reserve board seats for directors elected by employees by right of employment, while employee-shareholders can elect a director whenever they hold at least 3% of outstanding shares. Using a comprehensive sample of firms in the Société des Bourses Françaises (SBF) 120 Index from 1998 to 2008, we examine the impact of employee-directors on corporate valuation, payout policy, and internal board organization and performance. We find that directors elected by employee shareholders increase firm valuation and profitability, but do not significantly impact corporate payout policy. Directors elected by employees by right significantly reduce payout ratios, but do not impact firm value or profitability. Employee representation on corporate boards thus appears to be at least value-neutral, and perhaps value-enhancing in the case of directors elected by employee shareholders.

WORKING PAPERS

GOVERNMENT AWARDS TO CEOs

With François Belot.

This paper explores the value and corporate governance consequences of government awards in a sample of French CEOs appointed to the national order of the Legion of Honor (Légion d’honneur). Short-term market reactions around award announcements are positive, while the valuation of firms with awarded CEOs is larger than that of (matched) firms with non-awarded CEOs. This effect is more pronounced when the CEO is less intensively monitored (i.e., in firms with unitary boards of directors and/or firms without a large blockholder). We also observe that awarded CEOs are more likely to be fired for poor performance than non-awarded CEOs. We do not observe an increase in CEO compensation and distracting activities following the conferral of a government award. Overall, these results suggest that government awards play a governance role. Finally, we explore the channels through which governments awards create value and find strong evidence that they provide CEOs and their firms with increased political access.

CEO-CFO EDUCATIONAL TIES AND MERGERS AND ACQUISITIONS

With François Belot. Download

This paper analyzes the social connections between a firm’s chief executive officer (CEO) and its chief financial officer (CFO). We focus on French educational networks and examine the corporate governance and performance of firms whose CEO and CFO attended the same elite college (Grande école). Given the strong involvement of CEOs and CFOs in the takeover process, we investigate acquisition policies and observe that strong social ties within the top management team are associated with higher acquisitiveness and lower returns for bidder shareholders. These results are consistent with excessive managerial homogeneity reducing CEO monitoring and reinforcing decisional biases such as overconfidence. We find that CEOs are more likely to choose socially connected CFOs when CEOs are more powerful and are employed at firms with lower board monitoring. We also show that CEOs are less likely to be fired when the firms’ CFOs are drawn from the same network. These results suggest that social connections within executive committees come at the cost of CEO entrenchment and corporate governance failures.

OTHER PUBLICATIONS

REPÈRES D’ÉCONOMIE BANCAIRE : LES NOUVEAUX DÉFIS DU FINANCEMENT DE L’ÉCONOMIE

Collective book with Valérie Ohannessian, Clémentine Gallès, Jean-Hervé Lorenzi, Laurent Quignon, Anna Sienkiewicz. Preface by Marie-Anne Barbat-Layani, foreword by Jacques de Larosière. RB Edition, March 2017. Link

La compétitivité et l’attractivité de l’industrie bancaire constituent un enjeu stratégique essentiel pour la souveraineté financière et économique d’un pays. Sans banque, il n’y a pas d’économie. Aussi, la régulation financière devient-elle une arme concurrentielle. Or, les intérêts de l’Europe ont-ils été suffisamment pris en compte par les nouvelles réglementations issues du Comité de Bâle ? Le renforcement des exigences de solvabilité entravera-t-il la capacité des banques de la zone euro, des banques françaises en particulier, à financer les ménages et les entreprises ? Quels sont les impacts pour les banques et l’économie de la politique monétaire expansionniste de la Banque centrale européenne ? Et quelles sont les mutations induites par les révolutions réglementaire et digitale sur leur modèle de financement ? L’Europe saura-t-elle favoriser l’émergence de banques paneuropéennes capables de faire bloc face aux géants bancaires américains ? Pour la première fois, des économistes bancaires répondent avec pédagogie à ces questions. Pour prévenir tout jugement hâtif, voire erroné sur les banques, ils apportent les clés, les faits, les chiffres et les repères fondamentaux pour bien décrypter les phénomènes qui refondent le système de financement de notre pays. Cet ouvrage synthétique, dont chaque chapitre peut se lire séparément, s’adresse à tous ceux que le financement de notre économie intéresse : décideurs politiques, régulateurs, dirigeants d’entreprise, professionnels de la finance, journalistes économiques, universitaires, mais aussi aux étudiants, futurs salariés des établissements bancaires et au citoyen curieux…

FAMILY FIRMS AND PERFORMANCE: WHERE DO WE STAND?

With Florencio Lopez-de-Silanes, Position paper EDHEC Family Business Centre, September 2014. Download

Family-controlled firms dominate the global corporate landscape. In recent years, the efficiency of family firms has attracted considerable interest in both the finance and the management literatures. The purpose of this review is two-fold: (i) to provide a systematic analysis of the literature on family firms and performance in the fields of finance and management and (ii) to critically assess the robustness of the global evidence thus far.

L’ÉVOLUTION DE LA GOUVERNANCE DES ENTREPRISES DU SBF 120 SUR LA PÉRIODE 1998 – 2011

Revue Française de Gouvernance d’Entreprise, issue 12, December 2013, pages 89-107. Download

La gouvernance des sociétés cotées appartenant au SBF 120 s’est sensiblement améliorée depuis le début des années deux mille, en lien avec le renforcement des contraintes réglementaires et les exigences de plus en plus fortes de la part des investisseurs institutionnels, en particulier étrangers. Parmi les tendances remarquables, on note : un recul du cumul des fonctions de présidence du conseil et de direction générale, cette tendance s’inversant cependant légèrement depuis 2010 ; une présence de plus en plus marquée des administrateurs indépendants dans les conseils d’administration ou de surveillance, mais également des censeurs et des femmes : en 2011, la part des administratrices s’établit ainsi à 17,2%, contre 11,9% un an plus tôt ; une hausse du nombre de réunions des conseils d’administration et de surveillance et une assiduité accrue des administrateurs à ces réunions ; une diffusion massive de l’actionnariat salarié, qui concernait en 2011 environ 83,3% des entreprises du SBF 120 ; une baisse tendancielle des droits de vote double, même s’ils concernaient encore fin 2011 environ 57,6% des sociétés du SBF 120. Ces évolutions agrégées au niveau de l’ensemble des sociétés ne sauraient cependant masquer une forte disparité entre les entreprises, avec notamment une gouvernance plus aboutie pour les sociétés du CAC 40.