Does waste management affect firm performance? International evidence

in Economic Modelling (2022), 114

This study examines an important yet underexplored aspect of firms’ sustainability practices, i.e., waste management, in order to analyze its impact on financial performance. Although the extant ... [more ▼]

This study examines an important yet underexplored aspect of firms’ sustainability practices, i.e., waste management, in order to analyze its impact on financial performance. Although the extant literature has focused on various aspects of sustainability, the impact of waste management, which has disastrous consequences for the climate and firm performance, remains largely unexplored. Thus, using the 2002–2019 data of listed firms from 41 countries, we found a significantly negative (positive) relationship between waste generation (recycling) and financial performance. Our findings are robust to alternative variables, sub-sample analysis, and identification strategies. Moreover, a channel analysis showed that this relationship is influenced by operating costs, ESG performance-based compensation, industry nature, the Paris agreement on climate change, and the global financial crisis. Overall, the findings suggest that environmental initiatives are beneficial for firms and present important policy implications for regulators and firms. [less ▲]

Excess Control Rights, Multiple Large Shareholders, and Corporate Cash Holding Behavior

Scientific Conference (2021, October 01)

This article examines the effects of excess control rights of the controlling shareholder and the presence of multiple large shareholders on the propensity of firms to save cash out of cash flow, i.e. the ... [more ▼]

This article examines the effects of excess control rights of the controlling shareholder and the presence of multiple large shareholders on the propensity of firms to save cash out of cash flow, i.e. the sensitivity of cash to cash flow. Using a data set covering 6,430 firm–year observations of 634 French listed firms, the evidence shows that firms have high cash flow sensitivity of cash when the controlling shareholder‘s control rights exceed its cash-flow ownership. However, this sensitivity decreases with the contestability of the controlling owner‘s power. Taken together, these findings provide empirical support to the argument that firms experiencing excess control rights save more cash out of cash flow due to their considerable financial constraints that are lowered in the presence of high control contestability. [less ▲]

Risk disclosure and firm operational efficiency

in Annals of Operations Research (2021), 297

This paper examines the effect of risk disclosure on firm operational efficiency using a unique database of nonfinancial, and non-utility French firms belonging to the SBF 120 index over the period ... [more ▼]

This paper examines the effect of risk disclosure on firm operational efficiency using a unique database of nonfinancial, and non-utility French firms belonging to the SBF 120 index over the period 2007–2015. In a first step, we use a data envelopment analysis output-oriented variable returns to scale model to determine firm operational efficiency scores based on one output (i.e., sales revenue) and three inputs (i.e., net property, plant, and equipment; cost of goods sold; and selling, general, and administrative costs). These scores are used in a second step to estimate the effect of risk disclosure on operational efficiency after controlling for a set of other factors. The empirical results show a statistically significant positive relation between risk disclosure and operational efficiency, suggesting that firms tend to be relatively more efficient when they disclose more about their risk exposure. Overall, we provide evidence that firms with greater risk disclosure are seen by stakeholders as more credible and trustworthy, leading them to conduct better transactions and, consequently, to improve their operational efficiency. This result is consistent with the notion that stakeholders perceive transparent firms positively, particularly those revealing bad news. [less ▲]

The effect of risk disclosure on analyst following

in European Journal of Finance (2020), 26(14), 1355-1376

Prior research shows that financial analysts play an important information intermediary role in France. This study extends earlier research to examine the effect of risk disclosure on the number of ... [more ▼]

Prior research shows that financial analysts play an important information intermediary role in France. This study extends earlier research to examine the effect of risk disclosure on the number of analysts following listed firms. Using a unique dataset of French firms on the 120 SBF index over 2007−2015, the results show a positive and significant relation between risk disclosure and analyst following, suggesting that firms having greater risk disclosure attract more financial analysts. These findings provide empirical support to the argument that analysts incur lower costs of information gathering in firms with greater risk disclosure. The demand for analyst services is also more valuable in these firms, given their potentially high exposure to risks, implying greater analyst following. Overall, our results are in line with prior literature highlighting that analysts’ activities complement annual report disclosures and, generally, corporate disclosures. [less ▲]

Quelle place pour la divulgation volontaire des entreprises dans le choix de la source de dettes ?

Article for general public (2019)

L'effet de la divulgation volontaire sur le choix de la source de la dette: Étude portant sur les firmes françaises cotées

in Gestion 2000 (2019)

L’objectif de la présente recherche est d’examiner l’effet de la divulgation volontaire sur le choix de la source de la dette. Les banques jouent un rôle important dans la surveillance des firmes du fait ... [more ▼]

L’objectif de la présente recherche est d’examiner l’effet de la divulgation volontaire sur le choix de la source de la dette. Les banques jouent un rôle important dans la surveillance des firmes du fait qu’elles ont souvent accès aux informations privées dans le cadre de leur activité d’octroi de crédits. Il est, par suite, attendu que le recours au financement par dette bancaire soit plus élevé dans les firmes ayant un plus faible niveau de divulgation volontaire. Se focalisant sur un échantillon de 1560 observations de firmes françaises cotées durant la période 2007-2013, les résultats indiquent un effet négatif des indices de divulgation volontaire, notamment l’indice global et l’indice de divulgation de gouvernance, sur le recours des firmes au financement par dette bancaire. Il semble, de ce fait, que les firmes les moins transparentes préfèrent la dette bancaire qui leur permet d’atténuer les risques d’aléa moral auxquelles elles s’exposent. Dans un tel contexte, la dette bancaire constitue un mécanisme efficace de réduction d’asymétrie d’information et de renforcement de la surveillance des firmes et peut se substituer, ainsi, à la divulgation volontaire. De ce fait, la qualité de l’environnement informationnel semble jouer un rôle important dans le choix de la source de la dette. [less ▲]

Risk disclosure and analyst following:A study of French listed firms

Scientific Conference (2018, December 17)

In this study, we examine the effect of risk disclosure on the number of analysts following a firm using a sample of non financial and non utilities listed companies belonging to the 120 SBF index over ... [more ▼]

In this study, we examine the effect of risk disclosure on the number of analysts following a firm using a sample of non financial and non utilities listed companies belonging to the 120 SBF index over the period 2007−2015. We also investigate the role that information asymmetry plays in this relationship. Our results show a positive and significant association between risk disclosure and analyst following, suggesting that firms providing higher risk disclosure attract more analysts, probably because of the low cost of gathering information on more transparent firms. However, a high degree of information asymmetry mitigates this positive effect, indicating that risk disclosure may not be a sufficient incentive for analyst following. Thus, although the analyst works as an information intermediary, the high information asymmetry seems to act as a burden making the cost of following those high risk disclosure firms outweighing the benefits associated with it. [less ▲]

Risk disclosure and firm operational efficiency

Scientific Conference (2018)

This paper examines the effect of risk disclosure on firm operational efficiency using a unique database of non-financial, and non-utility French firms belonging to the SBF 120 index over the period ... [more ▼]

This paper examines the effect of risk disclosure on firm operational efficiency using a unique database of non-financial, and non-utility French firms belonging to the SBF 120 index over the period 2007–2015. In a first step, we use a Data Envelopment Analysis (DEA) output-oriented Variable Returns to Scale model to determine firm operational efficiency scores based on one output (i.e., sales revenue) and three inputs (i.e., net property, plant, and equipment, cost of goods sold, and selling, general, and administrative costs). These scores are used in a second step to estimate the effect of risk disclosure on operational efficiency after controlling for a set of other factors. The empirical results show a statistically significant positive relationship between risk disclosure and operational efficiency, suggesting that firms tend to be relatively more efficient when they disclose more about the risks they are exposed to. Overall, we provide evidence that firms having higher risk disclosure are seen by stakeholders to be more credible and trustworthy, leading them to conduct better transactions and, consequently, to improve their operational efficiency. This is consistent with the notion that stackholders positively perceive transparent firms, in particular those revealing bad news. [less ▲]

Board gender diversity and corporate social performance: Is there really a link?

Scientific Conference (2017, July 05)

Our study aims to see whether and how board gender diversity (BGD) may influence the corporate social performance (CSP). Theoretically, we rely on the stakeholders’ theory. From an empirical standpoint ... [more ▼]

Our study aims to see whether and how board gender diversity (BGD) may influence the corporate social performance (CSP). Theoretically, we rely on the stakeholders’ theory. From an empirical standpoint, we employ a dynamic panel system GMM (generalized moments method) estimator to estimate a dynamic model of CSP. Our study is carried out on a sample of 101 listed firms on Euronext Paris that made up the SBF Index 250 over the 2006-2010 (be-fore the enactment of the Copé-Zimmermann on gender quota on boards). We find that board gender diversity significantly impacts CSP. Furthermore, a critical mass of female directors is significantly and positively correlated with CSP. The effect is economically significant. Finally, we take into account French specificities by examining the influence of family firms. We found that family firms contribute to the role of female directors regarding CSR activities, especially there is a critical mass of female directors in these firms. [less ▲]

The control-ownership wedge and the survival of French IPOs

in Journal of Applied Accounting Research (2017)

Purpose – This paper investigates the effect of the control–ownership wedge of controlling shareholders (excess control) on the survival of French initial public offerings (IPOs). Design/methodology ... [more ▼]

Purpose – This paper investigates the effect of the control–ownership wedge of controlling shareholders (excess control) on the survival of French initial public offerings (IPOs). Design/methodology/approach − This paper studies a large sample of 434 French IPOs. The empirical analysis uses the Cox proportional hazard and accelerated failure time models. Data are manually gathered from IPO prospectuses. Findings – The findings support a positive relation between the control–ownership wedge and IPO survival time, indicating that survival is more likely in firms with high excess control levels. This result is consistent with the view that controlling shareholders with a large control–ownership wedge have incentives to preserve their private benefits of control by increasing firm survival chances. The findings also show that older IPOs are more likely to survive, while riskier and underpriced IPOs are more likely to delist. Practical implications – The results provide a better understanding of the role of excess control in IPO survival. They also enrich the debate on the efficiency of the one-share-one-vote rule. Originality/value – The research provides new insights into the role of agency conflicts in IPO survivability. In particular, it explores the effect of dominant shareholders with a control–ownership wedge on survival time. [less ▲]