Ownership Structure, Corporate Governance and Analyst Following: A Study of French Listed Firms

Sabri Boubaker (1, 2) , Florence Labégorre (3)

1 Groupe ESC Troyes en Champagne
2 IRG - Institut de Recherche en Gestion
3 UMR CNRS 8179

This study investigates the effects of some characteristics of the French corporate governance model – deemed to foster entrenchment and facilitate private benefits extraction – on the extent of analyst following. The results show that analysts are more likely to follow firms both with high discrepancy level between ownership and control and those controlled through pyramiding. These findings provide empir- ical support to the argument that minority shareholders value private information on firms with high expropriation likelihood, asking thence for more analyst services. Additional findings show that analysts are reticent to follow firms managed by controlling family mem- bers. This is, in part, explained by these firms’ reliance on private communication channels rather than public disclosure, producing a poor informational environment.

Mots clés: Corporate governance; Private benefits of control; Pyramids; Analyst following

Domaines: Finance [q-fin.GN]

Sabri Boubaker, Florence Labégorre. Ownership Structure, Corporate Governance and Analyst Following: A Study of French Listed Firms. Journal of Banking and Finance, 2008, 32 (6), pp.961-976. ⟨hal-01155604⟩