Shareholder Agreements and Firm Value: Evidence from French Listed Firms

Posted: 14 Oct 2008 Last revised: 9 Feb 2020

Date Written: September 1, 2010

Abstract

In listed companies, some shareholders can be signatories to agreements that govern their relations. This paper investigates the effects of such agreements on the valuation of firms. I use a sample of French firms that is well suited for my analysis insofar as French law requires the disclosure of shareholder agreements. In line with previous literature, a negative relationship between firm value and the dispersion of voting rights across major shareholders is observed. However, the existence of a shareholder agreement tends to offset this negative effect. This countervailing effect is more pronounced when a “concerted action” provision is in force and/or the contracting shareholders are of the same type. Shareholder agreements thus appear as efficient coordination mechanisms rather than expropriation mechanisms.

Keywords: Shareholder agreements, large shareholders, corporate governance

Suggested Citation

Belot, Francois, Shareholder Agreements and Firm Value: Evidence from French Listed Firms (September 1, 2010). Available at SSRN: https://ssrn.com/abstract=1282144 or http://dx.doi.org/10.2139/ssrn.1282144

Francois Belot (Contact Author)

Université de Cergy-Pontoise ( email )

THEMA
33 boulevard du Port
Cergy-Pontoise Cedex, 95011
France
+33 1 34 25 62 33 (Fax)

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