DERRIEN Francois

Unions provide employee representation and thus enable collective action by employees. This manuscript discusses the effect of unions on firm performance and the responses that firms implement in response to union activity. The first chapter shows that the effect of unions on firm performance depends on the number and type of unions present in firms. Compared to a single union, the presence of several unions decreases firm profitability because the increase in wages is greater than the increase in labor productivity. The second chapter discusses the link between earnings smoothing and union presence. Earnings smoothing reduces the wage premium associated with union presence, by reducing the perceived risk to employment sustainability. Finally, the third chapter shows that the practice of gender pay differentials, as a method of individualizing pay, limits the influence of unions within firms.

The first chapter shows that refinancing risk affects the market performance of a product. I find that firms with a large fraction of short-term debt (i.e., debt maturing within three years) exhibit significantly lower sales and market share growth.The second chapter studies how horizontal mergers and acquisitions affect stock market valuations. Horizontal M&A announcements induce an adverse average industry revaluation in a large sample of public and private M&A deals. Average competitor revaluation is a strong predictor of future industry returns. Competitor revaluation also depends on the public status of the target (positive when the target is public and negative when the target is private) and varies systematically with indicators of overall market mispricing. Our findings are consistent with the idea that investors incorporate new information about industry-wide mispricing into the valuation of non-merged firms.The third chapter studies how labor laws affect payment policy. This paper shows that labor's bargaining power affects both capital structure decisions and payments. I find that the passage of the wrongful termination law leads to an increase in dividends per share, dividend yield, and dividend payout ratio, while accounting leverage decreases.

This doctoral dissertation includes three essays related to the gender of financial analysts. The empirical results of the first study attest to an underrepresentation of female analysts and confirm that national culture has a significant impact on the representation of female financial analysts in the European countries studied. The second study shows that male analysts are more likely to make innovative recommendations than female analysts, due to a higher confidence in their judgment. Finally, the findings of the third study show that innovative recommendations trigger stronger reactions from investors, but there are no gender differences in market reactions to these innovative recommendations. The empirical findings of this dissertation complement the literature on financial analysts, and specifically on the impact of gender in financial decision making.

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This thesis deals with the influence of shareholders' investment horizon on firms' decisions and performance. It is composed of four articles. The first article reviews the literature and identifies gaps that the other three empirical articles seek to fill. The second article is devoted to the effect of the shareholders' investment horizon on employee satisfaction. Employee satisfaction is an intangible asset that, although it creates value in the long run, is poorly valued by the market in the short run. For this reason, long-term and short-term investors may not have the same interest in the companies they invest in satisfying their employees. The paper documents a positive effect of long-term investors on employee satisfaction and establishes causality in different ways. This result indicates that ownership structure is an important determinant of the implementation of CSR policies that create long-term value. The third paper studies the impact of shareholders' investment horizon on banks' performance during the crisis. The results of the empirical analysis show that a greater presence of short-term shareholders is associated with a greater fall in share price during the crisis. This association is partly explained by the greater risk-taking of banks with a greater presence of short-term shareholders before the crisis. It is also explained by the behavior of short-term shareholders during the crisis. The latter sold their shares massively, generating greater pressure to sell bank shares by all institutional investors. These results have implications for bank capital regulation, suggesting that the protective effect of bank capital varies with the investment horizon of the holders of the capital. The last paper focuses on the disciplinary effect of long-term investors. It shows that the disciplinary effect of long-term investors on the overinvestment of a firm depends on the length of time these investors have actually held the firm's shares. The results of the empirical analysis support the idea that, in order to build a shareholder base that generates more value, attracting long-term investors is not enough, firms should also induce their shareholders to hold their shares longer.

This thesis is composed of three separate chapters. The first chapter shows that managers overreact to risks that come to their attention. After a hurricane, the shock to perceived liquidity risk produced by the disaster leads firms in the vicinity of the disaster area to temporarily increase their cash holdings while the actual risk has not changed. The second chapter shows that managers strategically influence investors' attention to earnings announcements by warning them of the date of the event at a later or later time. This strategy allows them to smooth the impact of bad results on their stock price over time. The third chapter studies the effect of league tables in M&A activities. League tables rank investment banks. A bank's league table ranking predicts its ability to generate new business in the future, which gives banks an incentive to manipulate their rankings.

Equity research analysts tend to cover firms about which they have favorable views. We exploit this tendency to infer analysts' preferences for corporate policies from their coverage decisions. We then use exogenous analyst disappearances to examine the effect of these preferences on corporate policies. After an analyst disappears, firms change their policies in the direction opposite to the analyst's preferences. The influence of analyst preferences on policies is stronger for firms for which analyst coverage is likely to matter more: young firms, and firms with higher market valuations. Our results suggest that firms choose their corporate policies, in part, to be consistent with the preferences of their analysts.

This doctoral thesis is divided into three distinct chapters. In the first chapter, we study the sheep-like behavior of French individual investors. Our empirical analysis is based on a database of almost 8 million transactions made between 1999 and 2006 by 87,373 French individual investors. We show that sheep-like behavior persists over time and that past performance and level of sophistication influence this behavior. We also attempt to answer a question that has been little addressed in the literature: is adopting sheep-like behavior profitable for the individual investor? Our empirical analysis indicates that contrarian investors obtain more extreme returns (positive or negative) than sheepish investors. In the second chapter, we show that measuring the accuracy of a forecast of the future price of a stock is not sufficient to assess the quality of this forecast because the predictability of prices is likely to evolve over time and depends on the stock considered. We show that the persistence in individual differences in the accuracy of analysts' forecasts, highlighted in the literature, is not evidence of differences in skills between analysts. This persistence is, in fact, caused by a persistence in the volatility of stock returns. We introduce a measure of forecast quality that incorporates both forecast error and price predictability. Options theory provides us with the necessary elements to estimate this predictability. When this is taken into account, there are no longer differences in the skills of analysts. In the third chapter, we show that experienced and inexperienced analysts do not cover the same type of firms. Experienced analysts cover blue chip companies while inexperienced analysts cover small, young, and growing companies. These differences in coverage mean that inexperienced analysts issue price forecasts on companies whose returns are more volatile and therefore less predictable. As a result, forecast accuracy is not a good measure of whether experienced analysts are better or worse than inexperienced analysts. When these differences in hedging are taken into account, we find that experienced analysts nevertheless issue better forecasts. Although statistically significant, the economic impact of analyst experience is small.

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