Research Question/Issue:
This study aims to explain who drives corporate restructuring, after a period of important corporate governance changes in France, and where the respective role of Anglo-American institutional investors and domestic family owners have been the object of debate.
Research Findings/Insights:
Using extensive longitudinal data from French publicly-listed firms during the 2000-2007 period, we find that domestic family ownership is positively related to restructuring. This effect is magnified under conditions of high Anglo-American institutional investor ownership and poor firm performance. We also find that restructuring improves subsequent firm performance.
Theoretical/Academic Implications:
We contribute to corporate governance research on family firms with a contingent framework about the relative influence of different types of owners with supposedly different value systems and preferences on restructuring. Domestic family owners, even from a country where shareholder value maximization is not historically preeminent, promote restructuring. In contrast, the influence of Anglo-American institutional investors is indirect: the more they are present in the firm's capital, the more French family owners will further support restructuring, as a means to preserve their socio-emotional wealth. Anglo-American institutional investor influence on French family owners is further accentuated under conditions of poor firm performance.
Practitioner/Policy Implications:
Practitioners and, in particular, (potential and current) owners can use our findings to reflect on the implications for corporate decisions of the relative presence of different owners coming from different institutional environments and thus with potentially different objectives. Our results may also be informative to policy makers to further enhance effective regulation.