Corporate Ownership in France: The Importance of History

Abstract

their assistance with this paper. The usual disclaimer applies. 2 The French model of corporate ownership and control is quite distinct from the Anglo-American model. It has been described as an insider model because it contains a high degree of concentration of ownership, while the wider dispersion of ownership characterised by the U.K. and U.S. models has been termed an outsider model. Why are there such widely differing models between France, and, indeed, many Continental European countries, on the one hand, and the U.S. and the U.K., on the other? La Porta, Lopez-De-Silvanes and Shleifer (1998) have advanced the view that ownership in capital markets is concentrated where there is an absence of strong investor protection embodied in the legal system and regulatory arrangements. La Porta et al. highlight the role of contemporary institutions but downplay, aside from legal developments, the role of historical factors in shaping the structure of capital markets. More recently La Porta, Lopez-de-Silanes, Shleifer and Vishny (2000) asserted that: Common law countries have the strongest protection of outside investors – both shareholders and creditors – whereas French civil law countries have the weakest protection. (2000, 8)