French banks, governance, and specific investments

Anis Jarboui and Hamadi Fakhfakh

International Journal of Monetary Economics and Finance, 2008, vol. 1, issue 4, 338-354

Abstract: This paper analyses the impact of French banks on the adoption of specific investment in French companies through board representation and ownership stakes. The theoretical principles suggest that the banks refuse the financing of this type of investment. Therefore, the level of banking debt has a negative effect on the specific investment. Our hypotheses suggest that this effect changes according to the contribution of bankers in the corporate governance system. The results carried out on a sample including 176 French listed firms show a change in the behaviour of banks following a real implication in the corporate governance system.

Keywords: debt; French banks; corporate governance; specific investment; high technology; low technology; France; board representation; ownership stakes. (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijmefi:v:1:y:2008:i:4:p:338-354

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