CAPITAL STRUCTURE AND CORPORATE GOVERNANCE: THE FRENCH CASE

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Abstract

The world economy has undergone major changes during the last twenty years. Financial markets have grown spectacularly on the international level. In particular, stock markets rose substantially in the 1990s. At the same time, the combined process of deregulation and financial innovations transformed the internationalization of financial activities into financial globalization, which witnessed a considerable strengthening of both the impact and freedom of action of the main players. France did not remain unaffected by this evolution, much the contrary. This was all the more impressive given the historical weakness of the country’s financial markets. Many studies have been devoted to the growth of financial markets and many others to corporate governance, but the influence of the capital structure and the forms of governance on corporate strategies have rarely been empirically evaluated in the literature, due to the scarcity of relevant data. This paper aims at understanding (I) how the capital structure of French corporations has changed and, through an empirical study, (II) how this change may have impacted their strategy.

Keywords: Corporate Governance, Capital Structure, France

How to cite this paper: Jeffers, E., & Plihon, D. (2008). Capital structure and corporate governance: the French case [Special issue]. Corporate Ownership & Control, 5(2-4), 427-433. https://doi.org/10.22495/cocv5i2c4p4