Firms In France Research Articles

Subprime Crisis Shockwaves: Impacts On Capital Structure In Non-Financial Corporations

Based upon a dataset spanning about 2,780 non-financial firms in France over the period 2007- 2019, we explore the impact of the subprime crisis on their leverage ratio and capital structure, comparing the experience of the largest listed and unlisted non-financial corporates. Our results highlight that both listed and unlisted corporates tend to reduce their overall indebtedness ratios during the subprime crisis period and its aftermath, generalizing a significant corporate deleveraging for listed and unlisted firms especially during the post-crisis period. In addition, our findings show that listed corporates become more dependable on short- and medium-term credits than the long-term which may increase the exposure of these corporates to credit and liquidity shocks. While our outcomes reveal a clear preference to long-term debt for unlisted firms by expanding their debt maturities, relying on long-term credits and reducing their dependence on short- and medium-term debt which burden these corporates with short-term charges and payments that cannot afford during the crisis and post-crisis periods.

Entrepreneurial firm creation and economic uncertainty: an explainable artificial intelligence approach

ABSTRACT Through this paper, we examined the relationship between macroeconomic factors and new entrepreneurial firms in France during the 2000–2020 period; this relationship included several uncertainties and shocks (the 9/11, the 2008 global financial crisis, the Brexit, COVID-19 Pandemic, and so forth). To this aim, we applied various advanced machine learning (ML) techniques, including the eXtreme Gradient Boosting (XGBoost) algorithm, Light Gradient-Boosting Machine (LightGBM) algorithm, Neural Network (NN), Random Forest (RF), and Linear Regression (LR). We also investigated SHapley Additive exPlanation (SHAP) framework for interpretation and analysis purposes. Furthermore, we compared the performance and forecasting accuracy of the five models. The study revealed three major results. First, the XGBoost algorithm provides the most accurate prediction of a firm’s creation. Second, a heterogeneous relationship exists between new business creation and the business cycle. Third, higher GDP and unemployment levels are associated with greater procyclicality and countercyclicality in entrepreneurship, respectively. Finally, the results of the study suggest the importance of developing effective financial assistance during economic downturns to encourage faster recovery in the formation of new businesses.

Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash

This paper provides novel and comprehensive evidence regarding the impact of board gender diversity on the valuation of excess cash in companies. By analyzing a robust dataset of publicly listed firms in France from 2005 to 2017, the study finds that companies with a higher representation of women on their boards tend to significantly increase the value attributed to their excess cash reserves. The results suggest that investors perceive these companies as more capable of managing their cash efficiently, leading to a higher valuation. This perception likely stems from the belief that diverse boards contribute to better decision-making processes, which in turn enhances the effectiveness of cash utilization. Furthermore, the study uncovers that the positive relationship between board gender diversity and the valuation of excess cash is even more pronounced in firms that demonstrate high earnings quality. This finding underscores the importance of a transparent and reliable informational environment in strengthening the link between gender diversity and the efficient use of corporate resources. The research contributes to the broader corporate governance literature by emphasizing the critical role of board gender diversity in not only promoting effective cash management but also in increasing overall firm value through improved investor confidence and resource allocation strategies.

Innovation capital disclosure and independent directors: evidence from France

AbstractThis study aims to understand whether corporate governance mechanisms affect innovation capital disclosure (ICD) provided voluntarily on corporate websites by SBF 120 listed firms in France. The study tests multivariate models using pooled OLS, random effects, and generalized method of moments models. Firms use ICD as a useful, timely communication tool to highlight their innovation efforts. Our findings suggest that independent non-executive directors (INEDs) exhibit a conservative approach to the nature of innovation that requires extensive investigations with risky outcomes. They support discretion by limiting the extent of publicly disclosed information about research and development (R&D) progress, technological advances, and innovation output to protect the firms’ intellectual proprietary. INEDs seem to balance preserving firms’ competitive advantage and ensuring higher transparency levels to satisfy stakeholders’ needs. Additionally, board tenure moderates the relationship between INEDs and ICD. This study underscores the importance of the financial reporting of information about innovation capital that captures firms’ innovation capacities in a knowledge-based economy. It provides significant insights for management, policy-makers, and regulators who are involved in refining corporate reporting policies. This study is the first to examine the incentives of INEDs in influencing reporting practices related to a firm’s innovation investments, particularly in high-technology firms.

Men’s Experiences of Paternity Leaves in Accounting Firms

SYNOPSIS Accounting researchers and practitioners have made strides in addressing persistent gender inequalities in the accounting profession. However, these efforts have largely sidestepped men and masculinities. Our study considers the role of men and masculinities in gender inequalities by exploring how men in accounting experience paternity leaves. We conduct interviews with 13 men in audit firms in France. We find that fathers are reluctant to take leaves, which they view as vacation periods incompatible with their professional work. They see audit firms as offering less support to fathers than mothers, with support for fathers growing but still marginal. Finally, they experience a variety of emotions, including positive emotions around fatherhood and negative emotions around difficulties in reconciling fatherhood with professional responsibilities and paternity leaves. Practically, our findings imply that to address gender inequalities further, accounting firms need to change the norms around care work, including paternity leaves.

Employee-owned firms in France

Purpose France is the third country in Europe after Italy and Spain for the number of employee-owned firms, with some 2,600 worker cooperatives (SCOPs). The authors propose a comprehensive review of SCOPs and any barriers to their expansion.Design/methodology/approach The authors analyse relevant legislation; review the rich empirical economic literature on SCOPs; and offer new descriptive empirical evidence comparing SCOPs and other French firms.Findings SCOPs benefit from a consistent legal framework and a well-structured and supportive cooperative movement. Cooperative laws allow attracting external capital, provide barriers against degeneration and encourage profit allocations that favour investment and labour. SCOPs are distributed across a wide range of industries; are larger than conventional firms, as capital intensive, more productive and survive better. Despite this good performance their number remains modest, perhaps because of information barriers.Research limitations/implications An examination of the Italian and Spanish experiences and the relationship between SCOPs and the French labour movement might contribute to explaining the modest number of SCOPs.Originality/value The first comprehensive review of French worker cooperatives in four decades and the first with extensive comparative data on SCOPs and conventional French firms. With some of the best data on worker cooperatives in the world, findings have international relevance.

Credit Ratings and the Hold-Up Problem in the Loan Market

This paper studies whether credit ratings can alleviate the hold-up problem in the loan market. We exploit a refinement of the rating information produced by a certifier that rates private bank-dependent firms in France on a vast scale. The refinement causes some firms to receive a positive rating surprise that is not due to an improvement in firm fundamentals. We show that affected firms become less reliant on lenders that have greater ability to extract informational rents. These firms receive greater and less expensive bank credit from new and less informed lenders and invest more. We deduce that credit ratings reduce the monopoly power of informed banks, helping firms to expand their access to bank credit. This paper was accepted by David Sraer, finance. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4779 .

Firm‐level productivity growth returns of social capital: Evidence from Western Europe

AbstractWe analyze the firm‐level labor productivity growth returns of social capital—defined as a synthetic measure of “generalized trust,” “active participation,” and “social norms”—using a large sample of manufacturing firms in France, Germany, Italy, Portugal, and Spain. We find that firms' labor productivity growth is higher in areas with a better social capital endowment. The positive returns of social capital are, nevertheless, unevenly distributed across firms, with smaller, less productive, less capital‐endowed, and low‐tech firms benefitting the most from operating in strong social capital ecosystems.

Voluntary disclosure and corporate governance: substitutes or complements for firm value?

PurposeThe purpose of this study is to examine whether voluntary disclosure (VD) and corporate governance (CG) are substitutes or complements to each other in improving firms’ value in a non-Anglo-Saxon setting, namely, France.Design/methodology/approachThis study uses a sample of 990 listed firms in France from 2010 to 2020 to test the theoretical predictions. A random effect regression and two-stage least squares estimators are used to test the relationships. The results are largely robust across a number of econometric models that take into account diverse kinds of endogeneities.FindingsThis study reveals that VD and CG are positively associated with firm value. The finding also indicates that VD and CG work together as substitutes rather than as complements. Furthermore, the author’s evidence suggests that ownership structure and CEO characteristics are substitutive with VD in their effect on firm value. This evidence is consistent with the view that VD can add value to the firm but only under a number of conditions.Practical implicationsThe results shed further light on how a firm could improve its value among stakeholders by designing VD and CG practices effectively. Specifically, as VD generally acts as a substitute to CG, to accomplish their optimal economic outcomes, firms need to be discerning in executing VD and governance practices. In addition, firms have strategic flexibility in constructing VD and governance practices contingent on their own settings. Policymakers, investors and managers could use these results to examine CG and VD practices in France following the implementation of new regulations.Originality/valueThis study extends and contributes to the mixed or equivocal evidence of the relationships between VD, CG mechanisms and firm value. It contributes to the extant literature by first providing additional evidence, which suggests value-increasing effects of better-governed and more transparent firms. Second, this study reconciles extant disparate results by suggesting that VD can substitute CG in improving firm value. These findings have profound implications for policymakers, investors and firm’s managers.

Do welfare policies matter for immigrant entrepreneurship? An analysis in the context of France

AbstractThere is little research on the relationship between welfare policies and immigrant entrepreneurship. Accordingly, this paper examines changes in three welfare domains: child‐care, health/medical insurance, and unemployment insurance in the context of France since roughly the 1980s, but with a focus on the 21st century. Given changes in French welfare policy, I show that immigrants' greater access to fluctuating, sometimes declining, but overall increasing spending in the three domains, can be positively correlated with slowly increasing immigrant entrepreneurship since the early 2000s. However, I also argue that welfare policies do not seem to have a significant effect on the levels and survival of immigrant‐owned firms in France. The findings of this paper should nonetheless be taken with extreme caution in light of the obstacles to analyzing this relationship. As a consequence, I provide an assessment of three possible research designs as a route towards better understanding this relationship.

On the heterogeneity of the long-term leverage-growth relationship: A cross-country analysis of manufacturing firms

Despite a great deal of studies, the relationship between firm leverage and its impact on growth remains still unclear. We offer an analytical framework, which based on a comprehensive literature review and of related empirical reasoning, helps explaining the long-term leverage and firm growth nexus. Both the theoretical views and empirical evidence are mixed, and the lack of consensus may be the result of inconsistent estimation techniques and of the dual interpretation that firm leverage has. Analysing debt from credit institutions to firms in France, Italy, and Spain, and observed from 2010 to 2016, we bring a selection framework to trial. The comparative perspective seeks the establishment of regularities, while the use of a dynamic quantile panel estimator unravels its heterogeneity. Strong non-linearities are detected, but the selection framework finds no support. On the contrary, only firms in the lowest-growing deciles of the growth distributions benefit consistently from leverage.

Distant but Close in Sight: Firm‐level Evidence on French–German Productivity Gaps in Manufacturing

We study productivity‐level distributions of manufacturing firms in France and Germany, and how these distributions evolved across the Great Recession. We show the presence of a systematic productivity advantage of German firms over French ones in the decade 2003–2013, but the gap has narrowed down after the Great Recession. Convergence is explained by the better growth performance of French firms in the post‐recession period, especially of those located in the top percentiles of the productivity distribution. We also highlight the role of sectoral growth, firm size, and export intensity in explaining the above convergence. In contrast, the contribution of allocative efficiency was small.

CROSS-NATIONAL COMPARISON OF DYNAMIC INEFFICIENCY FOR EUROPEAN DIETETIC FOOD MANUFACTURING FIRMS

Food health and wellness has become increasingly important for consumers, and this has inevitably caused growth in the dietetic food manufacturing sector. This paper examines the technical inefficiency of dietetic food manufacturing firms in five major dietetic food producing European countries (France, Italy, Norway, Poland and Spain) for the period 2009–2017. To account for the sluggish adjustment of capital, we employed a dynamic production framework within the nonparametric method of Data Envelopment Analysis. Furthermore, we used the concept of a metafrontier to compare inefficiency between countries and analyzed three inefficiency measures: estimated with regard to a metafrontier (pooled dynamic inefficiency), computed with reference to country-specific frontier (managerial dynamic inefficiency), and the gap between these two frontier measures (program dynamic inefficiency). The results indicate that firms in Poland were the least dynamically inefficient among countries analyzed, while companies in Norway were at the opposite end of the spectrum. Managerial inefficiency was the largest source of pooled inefficiency for firms in France and Italy, while program inefficiency was the main reason of pooled inefficiency for firms in Norway, Poland and Spain. The results also reveal that investments were the most inefficient factor, followed by output, materials and employees.

Managing religion at work: a necessary distinction between words and deeds. A multiple case study of the postures facing religious expression in French organizations

PurposeReligious expression at work (REW) has a unique place in France. The authors studied the perception of the postures of four organizations in the face of this phenomenon, focusing on the gap between official posture and the posture applied by managers.Design/methodology/approachUsing a qualitative approach, the authors conducted semi-structured interviews (40), observation periods and documentary analysis within four organizations. This multiple embedded case study was undertaken in four different firms in France: an international private firm, a public organization, and two small- and medium-sized enterprises (SMEs) with original models of REW management.FindingsA distinction between aligned and non-aligned postures emerged. There was a lack of alignment in only two of the four organizations, and this alignment concerned only two units of analysis: prayer on break and wearing religious symbols. Several extrinsic factors were identified in this lack of alignment between the official posture and the posture actually applied by managers: the form of REW, the religion concerned and whether it had minority status in the country, the degree of clarity of the official posture, the degree of formalization of the official posture, the size and scope of the company, the degree of awareness of managers and their teams, the degree of involvement of leaders in the definition and implementation of the posture, and the purpose of the official posture.Research limitations/implicationsThis research provides a sensitive understanding of religious expression at work and shows that alignment is sought specifically for each form of REW. The distinction between official posture and applied posture is highlighted through the study of perceptions. In addition, this study enables the identification of factors that influence the alignment of official and operational postures.Practical implicationsThese results call for clarity of the official posture and for it to be defended by leaders, provision of meaning to postures by raising awareness among intermediate hierarchical lines, understanding of the applicable legal framework to transpose it to the local level, and analysis of unaligned forms of REW to build a strong, shared posture.Originality/valueThis study, which was carried out within a specific French context, concerns areas that have received little attention or have not been studied at all to date, such as REW in SMEs or in the public sector, and demonstrates for the first time the distinction between official postures and effective postures.

Sustainability & CSR: The Relationship with Hofstede Cultural Dimensions

This research explores the relationship between Hofstede’s femininity cultural dimension of quality of life and the masculinity cultural dimension of drive for success manifested by materialistic wealth by investigating the market value of the publicly traded firms appearing on the Dow Jones Sustainability Indices (DJSIs). The firms added to the DJSIs between the years 2010–2019 in countries with the femininity cultural dimension indicated by scores of ≤42, were selected for the first part of this study. In addition, France, with a masculinity score of 43 and Japan, with the highest masculinity score of 92, were chosen for comparison with the results from the countries with the femininity cultural dimension. The findings of this study indicate that companies in developed and emerging countries with the femininity cultural dimension show significant positive impact on their market values when added to the DJSIs. The publicly traded firms in France show a significant negative impact on their market values when added to the DJSIs. On the other hand, Japanese companies on the addition lists of DJSIs show a significant positive impact on their market values, despite Japan having the highest Hofstede masculinity score, a potential sign of cultural change in Japan.

The longer term impact of hiring credits. Evidence from France

This article studies the implementation of a hiring credit aimed at small firms in France during the Great Recession. Using French administrative data, I estimate its effect on employment growth and worker flows in eligible firms more than two years after its end. The credit had a positive effect on employment growth due to more hires. Employment growth did not fall below its pre-treatment trends after the end of the credit, meaning created jobs were not transitory. The public cost per job created is 19% of its private cost in 2012.

Impact of business intelligence solutions on the internationalisation of French software firms

Business intelligence solutions play a crucial role in the process of internationalisation for small and large companies. However, small and medium-sized firms have not been taking full advantage of these solutions. This multiple case study aims to explore the perceptions of owners and senior managers of French small and medium-sized software firms on the use of business intelligence in their internationalisation process using the updated Uppsala model as conceptual framework. The results of this research demonstrated that small and medium-sized software firms in France are not taking advantage of business intelligence solutions as most of them do not use these solutions, nevertheless, they perceive that BI solutions have a positive impact on the success of their internationalisation process. This article contains implications for practice for the BI solutions providers like having an alternative pricing model for SMEs and for the authorities to provide relevant data to software SMEs.

Predicting Exporters with Machine Learning

In this contribution, we exploit machine learning techniques to predict out-of-sample firms' ability to export based on the financial accounts of both exporters and non-exporters. Therefore, we show how forecasts can be used as exporting scores, i.e., to measure the distance of non-exporters from export status. For our purpose, we train and test various algorithms on the financial reports of 57,021 manufacturing firms in France in 2010-2018. We find that a Bayesian Additive Regression Tree with Missingness In Attributes (BART-MIA) performs better than other techniques with a prediction accuracy of up to 0.90. Predictions are robust to changes in definitions of exporters and in the presence of discontinuous exporters. Eventually, we argue that exporting scores can be helpful for trade promotion, trade credit, and to assess firms' competitiveness. For example, back-of-the-envelope estimates show that a representative firm with just below-average exporting scores needs up to 44% more cash resources and up to 2.5 times more capital expenses to reach full export status.

The learning organisation: choice of a model and study of its empirical modeling

ABSTRACT Although the Learning Organisation (LO) model presented by Marsick and Watkins (2003. “Demonstrating the Value of an Organization’s Learning Culture.” Advances in Developing Human Resources 5 (2): 132–151) gained significant acceptance in the academic and managerial areas, its operationalisation remains questionable. We reviewed the LO concept, analyzed its impact on the performance of new products and assessed its validity through three different specifications. We have used the Partial Least Square (PLS) software to study this question in a sample of biotechnology firms in France. The results showed that the most valid modeling approach considered LO as a second order construct of reflective-formative nature. Furthermore, when LO dimensions are implemented simultaneously, they are likely to generate a superior level of product innovation performance. We conclude the exposition by highlighting the implications of these findings.

The effect of voluntary disclosures and corporate governance on firm value: a study of listed firms in France

This study examines how voluntary disclosures (VD) and corporate governance (CG) improve firm value through the moderating effect of a legal change in a continental context, namely France. Based on a sample of 1001 observations of French firms listed on the SBF 120 from 2006 to 2016, I experiment with the theoretical assumptions of the study. A generalized method of moments estimation was used to neutralize the endogeneity problem. I estimated five different models on the whole sample; then I tested these models by splitting the sample into sectors to check the robustness of our estimations. Findings show that voluntary disclosure is positively associated with the firm’s value. The empirical results also indicate that a change in the law, as a moderate variable, helps to widen the firm’s benefit by the development and improvement in its sound governance system. Moreover, this outcome is reliable with the view that the nexus between VD and CG can add value for the firm in the presence of favourable jurisdictions. This research provides guidelines for investors, managers and policymakers to increase firm value by the application of the best practices of VD and CG in the presence of an advantageous law. To improve their reliability and performance, firms adopt a good mechanism of governance that is harmonious with the law and disclose more voluntary information to attract investors. These results offer new insights to the voluntary disclosure and firm value literature. I suggest that the application of the directive 2013/34/EU improves the corporate governance system. Also, the quality aspect of information disclosed in annual reports increases the firm value. Second, I investigated the interaction between VD and firm value in the presence of a CG mechanism and interaction variables.