IPP Report n°19 – September 2018
Authors: Laurent Bach, Sophie Cottet et Marion Monnet
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Every year in France, nearly 75,000 companies undergo a change in their mode of governance, whether it is a shift in their management or in ownership. These transition phases are a pivotal moment in the life of a company, and naturally raise the question of their consequences on the performance and sustainability of companies, as well as the role that public policies can play in supporting these transitions.
Since the early 2000s, and following several parliamentary reports expressing alarm at the relatively low level of intra-family business transfers, successive governments have implemented a series of measures aimed at encouraging the retention of businesses in the family fold, to the detriment of other types of transfers. However, such measures would be justified only if intra-family transfers proved to have a greater positive impact than transfers to a third party, an idea which is far from consensual in the empirical or theoretical literature on the subject. The aim of this study is to help shed some light on this debate by studying the consequences of a change in the mode of governance on corporate performance. We study separately the effects of a takeover by an external entity and those induced by an intra- or extra-familial change in management, then compare the effects of these different types of transition.