THE VALUE OF POLITICAL CONNECTIONS IN FRENCH INDUSTRIAL LISTED CORPORATIONS

Politically connected companies are quite widespread around the world. Financial literature has devoted an increasing interest to this issue, focusing its attention on the presence of potential benefits for these corporations, mainly in a cross country perspective, whereas few empirical analysis are dedicated to country-specific frameworks. The paper takes into analysis 223 French industrial corporations listed since 1998 to 2010 without any interruption and their different typologies of political connections and investigates the presence of a link between any sort of political connection and firms’ market power and productive efficiency. France represents a novel and interesting object of investigation for this topic, given its excellent positioning in governance indices and the time observed which overlap relevant institutional and political change, and the outbreak of economic crisis. The results show that French politically connected companies have a greater market power, in relation to unconnected companies, but show lower efficiency. Furthermore, differently from some previous studies, the difference between connected and not connected firms, both in terms of market share and efficiency are greater when political links are through directors.